Introduction
Today, on the 1st October 2015, when we are supposed to be celebrating the brave new world of the Competition Act 1998 (“CA”) as amended by the Consumer Rights Act 2015 (“CRA”), cartelists and other competition law infringers up and down the land[1] must be rubbing their hands in glee at the transitional provisions contained in Rule 119 of the Competition Appeal Tribunal Rules 2015 (“the 2015 CAT Rules” or the “New Rules”).[2]
The glee stems from the fact that these transitional provisions are very broad in temporal and material scope and yet very narrow in terms of gateway they provide into the new promised lands of flexible standalone claims,[3] and of collective redress leading to effective enforcement of private damages claims. The problem, in essence is this: these transitional rules set in aspic for an unnecessarily long time the old CAT regime and all its manifest defects, defects which were the express cause for reform in the first place.
New rule 119 to the following consequences (each of which I will explain in more detail below):
- The transitional provisions will apply for many years, given that the critical thing for the application of the transitional provisions is when the cause of action accrued not when it is asserted by bringing a claim. Given the pattern of cartel concealment and typical duration, causes of action will have in whole or in part preceded 1 October 2015. This will therefore affect the great majority of cartel cases in the pipeline but yet to be brought.
- Because of the continued application of Rule 31(2) of the Competition Appeal Tribunal Rules 2003 (“the 2003 CAT Rules” or the “Old Rules”), standalone claims either cannot be brought at all, or can only be brought in relation to damage suffered in the previous two years. On either view such a rule is hopeless for a standalone claim (whether in whole or in part) relating to a cartel of substantial duration where the wrongdoing has been concealed.
- Follow on claims can only be brought in conformity with the Old Rules, meaning: (a) Claimants must get permission to bring a claim before the infringement decision becomes ‘definitive’; (b) there will be real difficulty in bringing anything other that conventional tort claims; (c) follow on claims that are out of time under the old CAT rules but in time under conventional Limitation Act rules cannot be brought in the transitional period.
- The collective redress mechanisms will only be available in relation to claims that can be originated in the CAT, so will only in practice be available for the pendency of the transitional period for the old-style follow on claims identified above; the fact that claims can be transferred into the CAT is no palliative.
- Because many future claims will ‘straddle’ the implementation date, there will be a need to bring quite distinct proceedings under the transitional regime and the new post-CRA regime, where the limitations imposed by the transitional regime will produce glaring inefficiencies.
Put together, these defects make the new regime introduced by the CRA a bit like a top of the range Go Kart given to an excited 10 year old at Christmas who, upon unwrapping it, sees his Dad is holding the keys. Dad then says he will hold on to when he will be “big enough to drive it”. Or perhaps, more topically, it is simply like a new diesel car with a “defeat device” embedded in it.
The terms of Rule 119 of the 2015 CAT Rules
Since so much turns upon its terms, and so that it can give a fair account of itself, it is probably wise to set out Rule 119 in full. It provides as follows:
119.—(1) Proceedings commenced before the Tribunal before 1st October 2015 continue to be governed by the Competition Appeal Tribunal Rules 2003 (the “2003 Rules”) as if they had not been revoked.
(2) Rule 31(1) to (3) of the 2003 Rules (time limit for making a claim) continues to apply in respect of a claim which falls within paragraph (3) for the purposes of determining the limitation or prescriptive period which would apply in respect of the claim if it were to be made on or after 1st October 2015 in—
(a) proceedings under section 47A of the 1998 Act, or
(b) collective proceedings.
(3) A claim falls within this paragraph if—
(a) it is a claim to which section 47A of the 1998 Act applies; and
(b) the claim arose before 1st October 2015.
(4) Section 47A(7) and (8) of the 1998 Act as they had effect before they were substituted by paragraph 4 of Schedule 8 to the Consumer Rights Act 2015(c) continue to apply to the extent necessary for the purposes of paragraph (2).
And since much of the difficult flows from the continuation of Rule 31(1) to (3) of the CAT Rules its terms are set out below:
31(1) A claim for damages must be made within a period of two years beginning with the relevant date.
(2) The relevant date for the purposes of paragraph (1) is the later of the following –
(a) the end of the period specified in section 47A(7) or (8) of the 1998 Act in relation to the decision on the basis of which the claim is made;
(b) the date on which the cause of action accrued.
(3) The Tribunal may give its permission for a claim to be made before the end of the period referred to in paragraph (2)(a) after taking into account any observations of a proposed defendant.
What is immediately notable is that new Rule 119, and its revival of old Rule 31(1) to (3), was never fully consulted upon. The draft of the new CAT Rules which was circulated for consultation ended at Rule 118. Rule 119 was added because it was pointed out to BIS in the consultation on the draft New Rules that a transitional period was needed, not least to preserve the position of those who had let conventional limitation expire in the belief that they would be able to bring claims as and when existing infringement decisions became definitive. There are plenty of cartel decisions that have produced this sort of situation, Air Cargo being but one obvious example.
Scope
It may be helpful first to consider how limitation is dealt with under the new post-CRA regime, outside the transitional provisions.
The new section 47A(5) CA inserted by Schedule 8 of the CRA provides (in terms identical to the old section 47A(3) CA in play since 2003) that for claims in the CAT conventional limitation rules are disapplied. Then, instead of supplying limitation rules in the CAT Rules (the old approach), the new post-CRA scheme is that limitation rules are directly provided by the new section 47E CA. Section 47E effectively applies the relevant domestic limitation statute for England & Wales, Scotland and Northern Ireland, in the case of England & Wales being the Limitation Act 1980.[4] In short, the old CAT scheme contained in Rule 31, which had attracted so much criticism for the formalism, inflexibility and technical case-law it produced has been jettisoned.
However, section 47E applies such familiar scheme of limitation with a twist. The twist is that if a party tries to launch any form of collective action now permitted by the changes introduced by the CRA, but ultimately fails (in whole or in part) to obtain the requisite certification, the process of having sought to obtain certification acts as a form of “tolling” arrangement, that, for so long as certification has been pursued, stops the limitation clock from ticking: see new section 47E(3) to (7) CA. So a party who issues a claim 5 years after the discovery of a cartel (say, by becoming aware of a Commission Decision) and then enters an unsuccessful 2 year certification battle does not find itself time-barred from bringing conventional standalone proceedings at the end of that period.
This tweak to conventional limitation is of no interest whatever to parties initiating conventional claims outside the collective proceedings procedures but within section 47A, e.g. a conventional single/multi-party standalone or follow on damages claim. Since such claims can, just as in the High Court, be issued as of right, there is no need for such additional protection.
However, Parliament has provided by paragraph 8(2) of Schedule 8 CRA that section 47E can only be introduced with prospective effect. It is not hard to see why; since it extends limitation periods to the potential advantage of Claimants it might be thought to affect existing accrued causes of action. Given the potential for far greater enforcement or recovery one can see why such change might be strictly and purely prospective in effect only.[5]
By maintaining the disapplication of general limitation rules; by moving limitation from a topic covered by the 2003 CAT Rules to a topic governed by the CA itself in the new s.47E; and by making the new section 47E prospective in effect only, Parliament has created a need for a transitional limitation regime. The transitional rule plumped for by BIS in Rule 119 is a form of simple ‘porting over’ of the old limitation regime contained in old Rule 31.
The first point to note is that the scope of the limitation rule is very wide, since it applies to any claim falling within the new section 47A CA that has arisen before 1 October 2015: see Rule 119(3)(b). In truth, this wide temporal scope merely reflects, as it must, paragraph 8(2) of Schedule 8 CRA which says section 47E “does not apply in relation to claims arising before the commencement of this paragraph”. In that sense it is the CRA that makes the wide scope of the transitional rules inevitable.
In practical terms, given that the great bulk of the likely section 47A work will be related to cartels and other like infringements of A.101 TFEU or Chapter 1, this means that the transitional rules will continue to apply for a very long time, in whole or in part, to private claims that might be brought in the CAT. That is because any test that looks at when a “claim arises” looks at when a cause of action is complete. For tort, that means when damage is suffered; for a contractual claim (e.g. by a direct purchaser) it arises upon breach of duty. Concealment of such breach or of the facts that would show that such damage has been caused does not stop the claim from arising; it simply gives rise to a special rule as to whether such claim is time-barred if brought outside the ordinary limitation period (six years in England, five in Scotland). For most cartels, that typically operate for a number of years, sometimes very many years before discovery, that means that the claims are “arising” all the time, every time a downstream party is affected by a wrongfully increased price. Only those cartels implemented entirely after 1 October 2015 will fall exclusively under the new regime; and history shows they will take many years in turn to detect.[6]
This makes for a transitional rule with a very wide temporal and substantial reach indeed, one likely to affect much if not almost all of the private damages litigation arising from Article 101/Chapter I breaches, particularly cartels, contemplated in the next 5 to 10 years, if not substantially longer. That is because of the time that cartels typically operate for, take to come to regulators’ attention (invariably by whistleblowing) and then take to investigate up to an infringement decision.
Problem 1: are standalone claims permitted or possible?
Given that the CRA makes a wide-ranging transitional rule inevitable, it is at the next stage that the problems caused by the 2015 CAT Rules truly begin. For the very many claims within the scope of the transitional rules, new Rule 119(2) says the applicable limitation rule is to be found in the old Rule 31(1) to (3).
Old Rule 31, it must be remembered, was designed for an earlier version of section 47A (introduced in 2003 by dint of the Enterprise Act 2002) that was expressly premised on the existence of an “infringement decision”. The old section 47A(5)(a) CA expressly required there to be an infringement decision (even if not necessarily a “definitive” one, that is one that has survived potential or actual appeal in the EU or domestic courts) before a private damages claim could be made in the CAT. That was because the old post-2003 regime in the CAT was a purely ‘follow on’ claim system, where private actions had to follow a regulatory decision detailing the infringement found upon which a consequential claim could be brought, staying within the confines of the infringement identified in that decision (at least for the purposes of liability). It is in that context that the old Rule 31(2) must be seen. It provided that time ran for two years from the later of two dates: the date upon which the infringement decision became final and the date upon which damage was suffered, to cater for that rarest of infringement that would produce damage causing ripples or “overhang” damages after even the point of detection and decision upon the infringement.
Rule 31(2) and its alternative dates only makes sense on the assumption (made express in the old section 47A(5)(a) CA) that only follow on claims are to be permitted. It was not designed to provide a limitation rule for ‘standalone’ claims (i.e. claims not predicated upon a binding infringement decision) for the simple reason that such claims were intended to be impossible in the CAT.
Yet the new section 47A is designed to permit standalone claims to be brought in the CAT. That is why the new section 47A(2) talks of claims being brought “in respect of an infringement decision or an alleged infringement” of the EU or domestic competition rules. Such standalone cases have always been capable of being brought in the High Court, even if not in the CAT. Can standalone claims be brought in the CAT if such claims relate to damage suffered in the transitional period? Well Parliament plainly thought they should be since paragraph 4(2) of Schedule 8 CRA, the provision that introduced the new section 47A (and thus the ability to bring standalone claims in the CAT for the first time) stipulates that “Section 47A of the Competition Act 1998 (as substituted by sub-paragraph [4](1)) applies to claims arising before the commencement of this paragraph as it applies to claims arising after that time.”
This raises a real problem. Rule 119(2) of the 2015 CAT Rules, and the old Rule 31(2) that is thereby saved, do no permit standalone claims unless one ignores the original limited scope and aim of such rule as being a rule to be used for follow on claims alone. Yet if no standalone claims are permitted for the transitional period the new transitional rules may well be ultra vires, because they defeat the aim of para 4(2) of Schedule 8 CRA, which is that the wider new section 47A which permits standalone claims through its gates should be applied to claims that are already extant. The only potential way out of this mess is to pretend that Rule 31(2)(b) is designed to operate as a standalone rule, providing a two year limitation period. But there are a number of formidable difficulties with this exercise.
First, it seems to be a necessary but implicit premise of Rule 31(2), even read without the old s.47A(5)(a) that there will be an infringement decision, such that there will be the ability at any particular time certainty as to whether the limitation clock is ticking, or whether it is has been suspended by the operation of section 47A(7) and (8) because the decision has not become definitive. If that is right, standalone claims are per se impossible. Indeed, that implicit premise is made good by the content of Rule 31(3). Rule 31(3) only makes sense if the existence of an infringement decision is a necessary precondition of a claim, as further explained below.
Secondly, even if that is wrong and one goes down the route of fixing limitation using Rule 31(2)(b) by saying that for standalone cases the limitation rule is one operating to cap claims to damages suffered in the preceding 2 years, you have invented a limitation rule that is all but practically useless (itself an act entirely contrary to the aims and objectives of the CRA amendments), at least for the very cartel claims for which the new scheme was principally invented, because of the problems of concealment. Cartels are typically secret until someone blows the whistle. So it is to all intents a useless limitation rule that would render the CAT system an ineffective alternative to the High Court.
Third, if one contends that the situation can be salvaged by a later infringement decision, you have effectively reinvented what Rule 31(2) was always designed to be, namely a limitation rule purely for follow on claims. And one is then right back at the point where one must ask whether such a rule is ultra vires given the contents of para 4(2) of Schedule 8 CRA and the plain intention that (true) standalone claims should be capable of being effectively brought before the CAT under the new regime, even if they related to damages suffered in the transitional period.
Of course, it should be pointed out that ‘2 year from damage accrual’ rule if properly applicable to standalone claims might provide assistance in some Chapter 1/Article 101 cases of short duration (though in truth it is hard to think of any examples from past cases that would fit this straightjacket); and, perhaps, more realistically in more Chapter 2/Article 102 cases. But the reality is more likely to be that the transitional rules are in general less relevant to Article 102 claims, since (compared particularly with cartels) they are inherently more prospective and forward looking, and often begin with applications for injunctive relief to prevent continuation of abusive conduct. But even for Article 102 cases there are going to be claims affected, for instance those potential claims sitting in the wings in anticipation of a Commission Decision against Google for abuse of search market.
Problem 2: follow on claims have all the old problems
Where the transitional provisions apply follow on claims can only be brought in conformity with the Old Rules, meaning: (a) Claimants must get permission to bring a claim before the infringement decision becomes ‘definitive’; and (b) it will be impossible to bring hybrid claims and even in straight follow on claims there will be real difficulty in bringing anything other that conventional tort claims
Each of these is a substantial problem.
Taking first the requirement for permission, the existing CAT jurisprudence on this subject is restrictive as to when a claim can be brought before the infringement decision becomes definitive against the proposed Defendant. In effect, the CAT follows a fairly inflexible rule that the potential that the infringement decision might fall away due to appeal means that the initiation of the claim should be stayed, such that no progress can be made in the litigation whilst appeals are pending. Given the jurisdictional necessity for an infringement decision, and given that follow on claimants are confined to asserting the very infringement found in that decision and no more, this is perhaps understandable.
But if standalone claims are in any way permissible under the new Rules (even as hobbled by a two years from damage rule) then it difficult to see what the basis for the retention of this rule might be. Consideration of this issue simply serves further to expose the nonsense of any pretence that Rule 31(2) provides a time limit for standalone claims. Suppose a bold and lucky Claimant can show that a recently discovered cartel caused most of the material loss in the two years preceding 1 October 2015 and chooses to sue before any infringement decision is made, assuming Rule 31(2) does indeed provide a time limit for standalone claims. The claim can at that point be brought as of right; but as and when an infringement decision is reached thereafter and challenged then Rule 31(3) apparently kicks in to require permission for the claim. The only alternative is that a party can circumvent the requirement for permission in Rule 31(3) by bringing a claim before the infringement decision and in anticipation of it. This very debate is obviously ridiculous and unworkable and serves only to confirm that the necessary suppressed premise of the whole of Rule 31 is that there must first be an infringement decision.
But more widely, supposing standalone claims are possible under the transitional regime, it is very hard to see why the more flexible approach developed by the High Court in cases such as National Grid to reflect and accommodate the demands of the Masterfoods case-law should not be applied in the CAT as well. Concurrency of private claim and regulatory investigation should permit of flexible and fact-specific case-management so long as the golden rule of Masterfoods is observed, which can always be achieved by avoiding judgment upon issues may result in inconsistency of result. In this exercise a tailored consideration of those issues that overlap between the private claim and the regulatory investigation is always required, with the latitude to make progress being obviously greatest in relation to those (probably linked) areas that do not strictly overlap. Why then has the old discretion (and presumably with it, the old case-law as to its exercise) been retained? Again, there is no apparent or coherent policy informing this retention which is in fact quite inconsistent with the (assumed) move to embracing standalone claims.
The second problem relates to the types of claim that can be brought once there is a definitive infringement decision. The difficulties here are a function of the problems with standalone actions already described. It is clear that a follow on claim, complying with the EWS and WH Newson strictures about what may be alleged in terms of competition infringement to found liability, is possible. But any allegation falling outside those strictures gives rise to a claim that is in part standalone. In the High Court claims are commonly brought of such ‘hybrid’ nature, for instance because the Claimant wishes to allege that the cartel went on for longer than the period conservatively identified by the Commission, or included an additional party (that may be relevant for enforcement or jurisdiction reasons), or because it wishes to assert a further form of infringement upon which the Commission did not reach a concluded view. But unless such claims meet the requirements set out above for standalone claims – i.e. relate to damage suffered in the past two years (if, contrary to my first view, which is that standalone claims cannot be brought at all) – they cannot be brought. Once again this is problematic and makes a remedy in the CAT far from effective. Were claims being brought by individual claimants without using collective procedures (as to which see below) there would be a stark choice between issuing a hybrid claim in the High Court or a stripped down follow on claim in the CAT.
Quite apart from the impact on true hybrid claims these provisions will mean that the uncomfortably fine distinctions drawn by EWS and WH Newson will remain. For claims other than ‘plain vanilla breach of statutory duty’ or its equivalent in other foreign laws, for instance claims of breach of contract, deceit or misrepresentation, breach of fiduciary duty, breach of confidence etc flowing from the very conduct amounting to the competition infringement made by an affected party in a direct contractual relationship with the infringer, this is likely to continue to be an uncomfortable tightrope upon which WH Newson is not the last word. Once the transitional provisions are spent this problem may alleviate (though that in itself is a difficult question perhaps for another article) once the wider words of section 47A(1) come fully into play.
Problem 3: collective redress mechanisms will be hobbled in Article 101/Chapter 1 cases for the foreseeable future
All of the above described defects have a massive impact on the utility of collective proceedings, and collective settlements under the CRA, for the simple reason that in order to bring collective proceedings, or to present a collective settlement to the CAT it has to be the case that the individual claims so brought together are themselves capable of being brought under s47A and the relevant regime of limitation (whether s.47E when in comes into effect, or the transitional rules).
Since section 47A proceedings can only be brought in the narrow bounds identified above, it follows that collective proceedings can only be brought within such boundaries too. That means, despite the fanfare, that collective proceedings are going to be the rarest of things for the next five to ten years, confined in effect to strict follow on claims and abuse of dominance claims.
There is one particularly striking aspect of this narrow gateway into collective proceedings, and it concerns strict follow on claims that are out of time under Rule 31(2) but in time under conventional Limitation Act rules. It is not hard to think of reasons why parties may have let time under the CAT rules but where but a party remains interested in bring a claim that is in time under the Limitation Act were collective proceedings available. Claims for damages suffered by consumers have proven practically impossible to bring, as the Football Shirts case and its aftermath have shown. Consumers may have let time run out because it was practically impossible for them to bring a claim in the CAT (and the High Court for that matter); and yet, under the Limitation Act regime which will be applied from 1 October 2015 (to claims arising after that date) such claims are in time. The cases for which this is a problem are likely to be consumer or SME claims for modest individual amounts arising from settlements which by definition have not been appealed and so have in effect been ‘discovered’ by or revealed to the affected parties comparatively recently for limitation purposes.
It is particularly nonsensical that even strict follow on claims cannot be brought in relation to such claims. The very rationale of the CA reforms effected by the CRA was, in part, to provide opt in and opt out collective redress procedures to make recovery in those types of cases more effective. And the very real danger of not making collective redress mechanisms available to such claims is that cartels may remain profitable, particularly for those benefiting from substantial immunity and thus no fines or substantially reduced fines (e.g. whistleblowers or early confessors). That being so one must ask where is the policy justification for permitting strict collective follow on claims to be brought if in time under the old CAT regime but not permitting strict collective follow on claims to be brought where time-expired under the old CAT regime but still in time under the standard limitation rules. It cannot be to do with the age of the infringement, since the claims that can still be brought will very often be staler, since the reason they can be brought is that there has been a full infringement decision (which takes longer than settlement) and then appeals on liability grounds (which take many years). And the position is all the more strange when one considers that such claims may be issued on a non-collective basis in the High Court and then transferred into the CAT. But Rule 119(2)(b) will prevent such two or more such transferred claims being converted into collective proceedings.
Difficult issues will also arise for hybrid claims where the follow on aspect of the claim is otherwise ripe for collective proceedings. Suppose the infringement at issue identified in an infringement decision generates small but otherwise uneconomic losses for consumers or SME; but suppose there is also good pleadable evidence of a further or longer infringement that has the effect, if proven, of doubling claim value. How is one to proceed? The follow on aspect of the claim can be the subject of opt out or opt in collective proceedings once the infringement decision is final; but the standalone aspect that turns the case into a ‘hybrid’ claim can only be brought effectively in the High Court, and then only by book building, by a GLO or, possibly, after a test case judgment establishing the bounds of liability, by a representative action. The prospect of having to initiate parallel proceedings in order to get effective recovery, and even then issuing proceedings of fundamentally different scope (opt out versus a conventional multi-claimant ‘book’ claim; or opt out versus GLO) is daunting and depressing and raises, yet again, the question – is this consistent with what Parliament intended?
Problem 4: ‘straddling’ claims
The position described above is only aggravated when one considers the problems that will be caused by the attempts to obtain compensation in the case of a cartel or Article 101 infringement that ‘straddles’ the implementation date of 1 October 2015. Suppose a cartel runs from 1 October 2012 to 30 September 2017, a fairly typical duration, when it ends upon one participant whistleblowing, a fact that becomes rapidly known because of a quick US plea bargain. The cartel then takes two years to investigate in the EU, and four years (an extraordinarily conservative estimate if not settled) to progress through General Court and CJEU appeals.
The portion of the cartel arising after 1 October 2015 is capable of being the subject of standalone proceedings (so no need to wait for an infringement decision, still less a definitive one); and of opt-in or opt-out proceedings. There is no need to get permission to bring the claim whilst appeals are pending – it is an ordinary certification exercise for collective proceedings. Substantial progress can be made even during the pendency of an appeal. The claim can also be collectively settled.
But such claim cannot embrace that part in the three years preceding 1 October 2015. Any claim relating to that portion cannot practically be brought in the CAT until an infringement decision is made in 2019; and even then may be refused permission under old CAT Rule 31(3) until the infringement decision becomes definitive. (If you sue the immunity applicant, assuming jurisdiction can be established, then the same problem arises on the claim for contribution it brings against co-cartelists, as experience in old regime has already shown). Whilst the ‘new claim’ portion can look at additional allegations of infringement not dealt with in the final infringement decision, the ‘old claim’ portion must be strictly follow on, so the claims may have substantially different scope. The only way around this problem is to commence standalone proceedings in the High Court and then seek to transfer them into CAT on a conventional book or roster of clients individually signed up (since representative and GLO proceedings, even if they could be started, probably cannot be transferred to the CAT).
The problems of straddling can obviously combine with the need to bring a hybrid claim, generating a problem of truly mind-bending complexity.
Why are we here?
The consequences flowing from the transitional provisions, as described above, are a self-evident and, I would suggest (from a UK plc perspective) embarrassing mess. It is a system that will be merely productive of delay, procedural shenanigans, expense and barriers to effective enforcement of the very kind the CRA was supposed to remove. It is a mess that will be with us for some considerable time to come.
The tragedy of all of this (save, of course, from the perspective of infringers) is that it is unnecessary.
Why? Well since: (i) the policy of the CRA was plainly to try to harmonise High Court limitation with CAT limitation, subject only to the special tolling rule that would apply to attempted collective proceedings; and since (ii) the policy of the CA was already to permit transfer in and out of the CAT of proceedings that (limitation aside) fell within section 47A, it by no means followed that the transitional rules simply had to preserve the old regime embodied in the old CAT Rules. The wide rule-making enabling powers provided by section 15(1) to (3) and Part 2 of Schedule 4 to Enterprise Act would certainly have enabled a different approach in the transitional period.
It was open to BIS to implement a transitional regime that did just three things, namely: first, to indicate that any claim that falls within the material scope of the new section 47A CA and which was and is capable of being brought in the High Court compatibly with standard limitation rules contained in the Limitation Act was a claim that could now be originated (not just transferred) in the CAT as an alternative to the High Court; secondly, to preserve, perhaps only in part, the ability to rely upon the old CAT limitation rules for those claims which had only been kept alive thereby (i.e. claims that were time-barred under usual Limitation Act rules or their equivalent)[7]; and thirdly, to provide that claims already issued should be governed by the Old Rules, but only to the extent necessary.[8]
The only discernible justification for the strange choices made are the terms of Schedule 8 para 8(2) of the that says that the provisions in section 47E CA (to be inserted with effect from 1st October 2015) should be purely prospective in effect. But these provisions certainly do not require the simple continuation of the old CAT regime until 1 October 2015; they do not preclude transitional provisions that seek harmoniously to mesh the old purely follow regime to the new enhanced regime that permits standalone claims and collective actions, and intends that such provisions should be available in relation to causes of action that have already accrued. In particular, the drafters of Rule 119 have missed the point that a change of venue or forum in relation to a claim that can already be brought in another Court is in no way a substantive change but instead is a purely procedural change. Such changes (for instance changes to the CPR or to Tribunal rules) are typically introduced to govern claims that have arisen or accrued but have not yet been brought. Indeed, procedural changes are typically also applied to claims already pending, with the new procedures applied prospectively.
What ultimately seems to underpin Rule 119 is thus no considered position of policy but rather a misreading of the requirements of Schedule 8. It is a fundamental confusion between purely procedural changes and changes of substantive law in circumstances where at least one of the major goals of reform introduced by the CRA was to harmonise, as far as possible, the relationship between the High Court and the CAT, with the CAT having special limitation rules only in relation to collective claims, and only then because of the likelihood of ‘certification battles’. Beyond this, there is no policy justification for the transitional rules and the arbitrary and unprincipled effects that stem from them and which will operate to make the new regime practically ineffective for a wide variety of cases for years to come.
Of course, it is not the case that no standalone or follow on claims or collective claims will be possible. Standalone claims may be possible where all or the material loss is suffered in the two years preceding the Act (though I think not); strict follow on claims will be possible as of right as and when infringement decisions have become final in the two years before the Act’s coming into force (e.g. in a case such as MasterCard interchange fees; or as and when the appeal process is spent in Air Cargo) and perhaps earlier than that if the CAT revisits its approach to the grant of permission to bring a claim before infringement decisions become final, though hybrid claims will be impossible and claims for allied wrongs (such as breach of contract) may also be impeded. Collective claims will be possible for all such permissible standalone or follow on claims.
But these are in fact a small portion of the claims that might be brought were an approach to transitional limitation based upon the Limitation Act (as advocated above) adopted. Ultimately, the unanswerable question remains “what is the reason of policy for denying other claims that falls within section 47A and which may still be issued in the High Court access to the collective redress procedure?”
And if there is good answer to that question, a further irony of the approach of Rule 119 from the perspective of the collective redress mechanisms is that the limitation rules likely to operate to the particular material disadvantage of the very claims it was supposed to enable, namely claims it was uneconomic or too risk to bring other than on a collective basis.
[1] ‘Land’ here is really a paraphrase for “those able to establish jurisdiction to bring a claim falling within the new section 47A of the Competition Act wherever they may be domiciled”. Like the old section 47A, the post-CRA section 47A permits claims governed by foreign applicable law to be brought under it, so long as jurisdiction can be established in the ordinary way. Thus, say, a German company could sue for German damage governed by German tort law so long as, say, one of the Defendants was a UK domiciled company. German limitation rules would be disapplied.
[2] The 2015 CAT rules were made on 7 September 2015 and come into force with the Competition Act as modified by the Consumer Rights Act on 1 October 2015.
[3] Note that the new rules, and the subject of this article, apply only to the new claims that can be brought in the CAT. The rules on claims in the High Court (or other forums) remain unchanged.
[4] This in itself raises a nice problem for foreign law claims whose limitation period is ordinarily supplied by the Foreign Limitation Periods Act 1984, to which no reference has been made. Section 47E may well be a reversal of the policy of that Act for claims that fall within section 47A, albeit one confined to the CAT.
[5] Though it is worth noting that such concerns never bothered the drafters of the original section 47A follow on regime back in 2002/2003. Their concerns were confined to preventing the new, potentially more generous rules in the old Rule 31 of the 2003 CAT Rules from reviving claims that had already expired under conventional limitation rules: see the old Rule 31(4) which has not been continued under the new CAT Rules.
[6] The cartels currently being investigated by the Commission typically relate to the events of the mid to late 2000s, and sometimes as early as the 1990s. Even the trophy A.102 investigations into ongoing alleged abuses, such as that into Google’s practices in relation to price comparison sites, relate to events dating back into the mid 2000s.
[7] This will be a real problem or at the very least risk in relation to a Commission decision that has then been appealed to the General Court and beyond. Even under a concealment approach to limitation, time may well start running with publication of the press release, and is certainly likely to start in all bar the exceptional case with publication of the non-confidential version of the Decision. Yet appeals up the CJEU may very well take longer than six years to complete. The Air Cargo liability appeals are a case in point, and notable for the fact that even the immunity claimant has appealed on liability grounds (thereby precluding UK follow on claims in the CAT under the Old Rules).
[8] It is far from clear why the Old Rules continue to require to be applied for all purposes to claims already brought. Such approach is never applied, say, to wholesale changes to the CPR. Why should intervention in, consolidation of, case management or transfer of such claims be governed by the Old Rules?
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