This week has brought further news on the Libor interest rate fixing saga, with UK broker ICAP receiving an $87m fine.
However, whilst the media spotlight remains on the worldwide regulatory and criminal proceedings, a large number of potential claimants are waiting in the wings to bring private damages claims against those responsible for fixing the rates. Perhaps the biggest problem facing such claimants is how to quantify their loss. It is enormously complex, and therefore expensive, to try to work out whether the rate fixing harmed a particular person, and if so by how much.
Anyone trying to think of a way around this problem should pay attention to last week’s case management decision in Deutsche Bank AG and others v Unitech Global Limited and another  EWHC 2793 (Comm). Continue reading
The Competition Bulletin is pleased to welcome the second in our series of blogs by Oxera Consulting on key economic concepts for competition lawyers. In this blog, Tuomas Haanperä, a Senior Consultant, discusses the economic issues surrounding follow-on damages claims in margin squeeze cases (where a dominant firm has charged a combination of retail and wholesale prices that prevents other, ‘squeezed’, rivals from competing). This topic was recently discussed at the Oxera Economics Council, a forum of prominent European economic thinkers and academics that meets twice a year to discuss current economic policy topics. Continue reading
It is time for what has become the Competition Bulletin’s regular half-yearly update of EU and UK competition law developments. (For our previous round-ups see here).
Thinking big Continue reading
Filed under Abuse, Agreements, Conflicts, Damages, Free movement, IP, Mergers, Penalties, Pharmaceuticals, Policy, Procedure, Procurement, Round-Up, State aid, Telecoms
The trio of documents published by the Commission last week mark an important moment in private competition enforcement in the EU. After years of debate and consultation, it is now clear that, whilst the Commission is determined to take some important steps to assist claimants in private actions, it is not prepared to bring about the sorts of fundamental changes which would be needed to realise the full potential of private enforcement.
The three documents each deserve close scrutiny. This blog is intended only to provide a broad overview. Continue reading
The Competition Bulletin is pleased to announce that Oxera Consulting will be contributing a short series of blogs on key economic concepts for competition lawyers. Robin Noble, Oxera Associate Director and an expert economist on commercial and competition law damages actions, is our first guest blogger. His post discusses the issue of pass-on—ie, the extent to which the purchaser of a cartelised product passes on the overcharge, and therefore its losses, to its own downstream customers. Robin can be contacted at firstname.lastname@example.org.
Pass-on is a key issue in virtually all cartel damages claims in the EU. It can make or break a claim: assuming that pass-on is a valid defence to a damages claim, complete pass-on means a claimant cannot claim for any absorbed overcharge, the main head of loss in these actions.
This post focuses on two points. First, it provides a brief summary of the key insights provided by economic theory; second, it discusses two important real-world issues: cost plus pricing, and price-pointing. Continue reading
The Competition Appeal Tribunal today delivered that rarest of beasts: a judgment awarding damages in a follow-on claim. After its decade-long fight, Albion Water has been awarded around £2 million for Dŵr Cymru’s abuse of dominant position in relation to the price it was prepared to charge Albion for the use of its water pipes.
The 130-page judgment consists largely of a detailed analysis of the counterfactual – i.e. what would have happened, and what profits would Albion have made, if Dŵr Cymru had not behaved abusively. It is, however, worth highlighting two points which will be of more general interest. Continue reading
Filed under Abuse, Damages
Stand alone, follow on and hybrid damages claims arising out of multijurisdictional cartels are generating some of the most novel and interesting current problems in conflicts of laws, both in relation to issues of jurisdiction and applicable law. On the jurisdictional side conventional wisdom has it that there are three main routes by which Claimants can seize English jurisdiction.
First, you can find a so-called “Anchor Defendant” that is a cartelist (and it must be an addressee cartelist if in the CAT so long as Mersen is good law) domiciled here, against which you can proceed as of right under Article 2 of the Brussels Regulation. Then you can bring in other cartelists under Article 6 (i.e. a defendant against whom the claim is closely connected to that against the anchor defendant such that determining them together avoids the risk of irreconcilable judgments). Where the Anchor Defendant is an addressee of the decision this tactic is unproblematic. Continue reading
The big news from last week’s UK announcement on reforming private competition enforcement is that the government plans to introduce opt-out class actions for competition claims.
The proposals incorporate various “safeguards” designed to ensure that the perceived excesses of US class actions do not become a problem here. Some of the safeguards are really no more than statements of the obvious – no-one can be surprised that we will not have US-style triple damages, or that law firms won’t be able to bring a claim without even having a claimant. On the other hand, some safeguards – such as the prohibition on contingency fees – will surely serve to limit the usefulness of UK class actions.
Financing aside, the big unanswered question is how attractive claimants will find such class actions (or “collective actions”, as the government prefers to call them, emphasising the differences with the US). Continue reading
As today is the first day of the new court term, I thought it would be a good moment for a round-up of last term’s competition cases – and, of course, the customary plug of our own blogs.
If there was a theme to the Michaelmas term, it was the highs and lows of follow-on claims. Few pieces of legislation can have attracted so much judicial attention in so short a time as s.47A of the Competition Act 1998. It has now gone as far as the Supreme Court, which confirmed in BCL Old Company Ltd v BASF plc  UKSC 45 that the rules governing limitation periods for bringing follow on claims in the CAT are not so unpredictable as to breach European principles of legal certainty (a topic which I blogged on here). Continue reading
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.  EWHC 3680 (Ch), a case arising out of the copper plumbing tubes cartel. Continue reading
The White Paper which first proposed follow-on damages claims promised a “swift” and “streamlined” procedure. The idea was that when a regulator had made an infringement finding, there would be a simple way for victims to claim damages without having to prove the infringement afresh.
In reality, however, many follow-on actions have been bogged down by procedural skirmishes. The Court of Appeal has ruled on the need for the facts alleged in a follow-on claim to be part of the infringement actually found. It has ruled on the extent to which findings of fact in an infringement decision are binding in the follow-on action.
And it has on three occasions turned its attention to the time limits for bringing follow-on claims in the Competition Appeal Tribunal. Continue reading
The Court of Appeal’s judgment last Friday in KME Yorkshire Ltd & ors v Toshiba Carrier UK Ltd & ors  EWCA Civ 1990 will gladden the hearts of Article 101 damages claimants. It confirms that the Court will be generous in assessing the adequacy of a claimant’s pleaded case – at least where a Commission decision has already established the existence of a cartel.
By a Decision dated 16 December 2003, the Commission found that three manufacturers of industrial copper tubes had between 1988 and 2001 operated a price-fixing and market-sharing cartel under cover of a trade association. Continue reading
As most of us are now returned from our summer holidays, I thought I’d take advantage of the ‘back to school’ feeling with a round-up of the most significant competition cases since Easter. This also provides a good excuse to highlight the best blogs from the Competition Bulletin’s first couple of months.
I’ll start with a case that should, but probably won’t, make the law reports: the decision of the Appeal Panel of the Rugby Football Union, which held in an appeal by London Welsh that the RFU rules on primacy of tenure are contrary to Articles 101 and 102 TFEU and therefore void. The case is notable not only for the finding itself, but also because it was heard and decided so quickly – arguments which would take days in the High Court (and probably weeks in the CAT) were heard over the course of a day, and the 38-page judgment completed the following day. James Segan blogged on the case here.
There has been much good news for claimants in follow-on damages claims. Continue reading
The Court of Appeal’s remarks in BT v Ofcom (Partial Private Circuits) make Ofcom’s dispute-resolution power a still more distinctive alternative to court litigation, and in the right circumstances a more attractive one.
The appeal arose out of a dispute, brought to Ofcom under s.185 Communications Act 2003, about whether BT had overcharged for partial private circuits (“PPCs”), components necessary for other communications providers to extend their networks. Ofcom decided in 2009 that it had, and ordered repayment. That decision was upheld by the CAT on appeal.
Much of BT’s further appeal to the Court revolved around whether Ofcom had failed to take various aspects of the domestic and European regulatory framework into account. The Court ruled that it had not.
But there were two issues of greater long-term interest. Continue reading
In 2 Travel Group PLC (in liquidation) v Cardiff City Transport Services Limited  CAT 19 the Tribunal has made the first ever domestic award of exemplary damages for breach of competition law. The case is a significant landmark, but involves no radical development of the law; it is certainly not a declaration of “open season” for exemplary damages claims.
The Claimant, 2 Travel, was a struggling South Walian bus company. The Defendant traded as “Cardiff Bus” and, true to its name, was the major player in the Cardiff bus market.
In 2004, war broke out on the city streets. 2 Travel launched a new, “no frills” bus service in Cardiff. Cardiff Bus retaliated with force. It laid on “battle buses” (a term used, rather infelicitously, in its own internal documents), which were carefully planned to arrive just before 2 Travel’s buses and snatch 2 Travel’s potential customers. The militarism of Cardiff Bus’s response extended even to internal recruitment of drivers for the covert war against 2 Travel with a spoof of the famous First World War poster of Lord Kitchener: “Your Company Needs YOU”. 2 Travel’s Cardiff venture failed, and in 2005 the company entered liquidation. Continue reading
Filed under Abuse, Damages