CAT rejects first ‘opt out’ competition damages collective action (for now)

31 Mar 2017

The Competition Appeal Tribunal (CAT) has today given its judgment on the first ever application for a Collective Proceedings Order (CPO) under the new competition damages collective actions procedures introduced by the Consumer Rights Act 2015. The CAT has refused to grant a CPO on the basis of the Claimant’s proposed case on consumer losses as set out at the application hearing, but has left the door open for the Claimant to return to the CAT with fresh economic evidence estimating alleged consumer losses on an alternative basis.


Under the procedures introduced by the Consumer Rights Act 2015, any person can apply to the CAT for permission to bring claims for damages for competition law infringements acting as representative of a class of persons (such as consumers who bought a particular product) who are alleged to have suffered losses as a result of the infringement. Such actions can be brought on an ‘opt-out’ basis, so that, for example, every person in the UK who purchased a particular product during a particular time period will be within the scope of the proceedings unless he or she actively chooses to ‘opt out’.  If the action results in an award of damages, such class members will be able to submit claims for a share of those damages, and the amount that is left over in the damages fund after those claims have been processed may be given to charity.

The application for a CPO was issued in June last year by Ms Dorothy Gibson (the General Secretary of an unincorporated association calling itself the National Pensioners’ Convention) against Pride Mobility Products Ltd, an Oxfordshire-based distributor of mobility scooters.

The proposed action is a ‘follow-on’ action brought to recover damages for losses alleged to have been suffered by consumers in consequence of infringements found by a decision of the Office of Fair Trading (OFT). The OFT’s decision was issued in May 2014 and found that Pride and eight of its retailer customers had infringed the Chapter I prohibition in the Competition Act 1998.   By each of those eight agreements, Pride and a retailer (a “Relevant Retailer”) agreed that the retailer would not advertise below-RRP prices on the internet for particular models of scooter (“Relevant Models”).  Pride advised the retailers that they should instead state on their websites, “Call for best price”.  Pride had been concerned about the promotion of heavily discounted prices on the internet undermining the viability of ‘bricks and mortar’ stores and their ability to offer buyers of mobility scooters pre-sales physical assessments and after-sales support; but the OFT found that the way Pride had gone about trying to address that concern was unlawful.  No penalty was imposed on Pride, and Pride did not seek to appeal the OFT’s decision.

The claimant Ms Gibson (who did not herself purchase any mobility scooter) is claiming damages on behalf of everyone who purchased a Pride scooter in the UK during the 2-year period from February 2010 to February 2012 within which the eight infringements were operating.

A hearing of her CPO application took place over three days in December last year. At that hearing she relied on evidence from an economic expert who estimated the losses suffered by consumers at between £2.7m and £3.2m (not including interest).  The basis for that estimate was that the eight agreements identified in the OFT’s decision were pursuant to a “policy” of Pride to restrict retailers from advertising below-RRP prices on the internet.  The economic expert, who was cross-examined at the hearing, explained that he intended to quantify the consumer losses by comparing sold prices for the Relevant Models during the 2-year period during which the infringement place, with sold prices for those models in subsequent years.

The Tribunal’s judgment

The Tribunal’s judgment first dealt with Pride’s case that the CPO application should be refused because the provisions of the Consumer Rights Act 2015 allowing the bringing of collective actions on an ‘opt-out’ basis should not be permitted to have retroactive effect. Both at the times when the infringements occurred, and at the time of the OFT decision, it was not possible for actions to be brought on an ‘opt-out’ basis so as to claim damages for consumers who had not indicated any wish to bring a claim and who might never receive those damages personally.  The Tribunal rejected Pride’s argument that to allow an ‘opt-out’ action in these circumstances would contravene the principle against retroactivity which under the Human Rights Act and/or EU law.  The Tribunal found that there was no such contravention because the introduction of the ‘opt-out’ regime, although a radical procedural change in the UK, was not a change in substantive law.  The Tribunal also considered that Pride could have anticipated the change at the time when it was deciding whether or not to appeal the OFT’s decision in May 2014.

By its judgment, the Tribunal has declined to grant Ms Gibson a CPO at this time because her proposed basis for quantifying losses did not stand up to scrutiny in the context of a ‘follow on’ claim. Given that the proposed action was a ‘follow-on’ action, any estimate of consumer losses would have to be in relation to the alleged losses suffered by consumers specifically as a result of the eight infringements found by the OFT.  Ms Gibson’s economic expert should therefore not have sought to quantify damages by reference to Pride’s “policy”, since such an approach would effectively allege that Pride committed infringements in addition to the eight found in the OFT’s decision.

The Tribunal also expressed doubts the approach that the economic expert proposed to use for quantifying the losses, namely to compare sold prices for the Relevant Models during the 2-year period during which the infringement place, with sold prices for those models in subsequent years. Such an approach risked confusing ‘cause’ and ‘effect’.  If such a comparison were to be useful, it would be necessary to show that any reduction over time in the average sold prices of the Relevant Models was attributable to the cessation of the eight infringements, since this could not be assumed.

The Tribunal has, however, left the door open for Ms Gibson to return to the Tribunal with fresh economic evidence seeking to quantify the alleged consumer losses on an alternative basis. In that regard, the Tribunal considered that, given the effects on the interests of any consumers who may have suffered losses, it would not be proportionate to now exclude the possibility for Ms Gibson’s economic expert to reformulate his proposed approach for quantifying damages on the basis of a legally correct approach.  Any such quantification would need to be in relation to consumer losses attributable specifically to the eight infringements found in the OFT decision, and would therefore need to exclude any losses attributable to the conduct of any other retailers who chose to abide by Pride’s “policy”.  The economic expert would also need to explain how he proposed to show that any changes in sold prices for Relevant Models over time were attributable to the cessation of the infringements.

The Tribunal has formally adjourned the CPO application and invited submissions from the parties as to the form of order it should make.


The judgment will be of great interest to competition law practitioners as a first example of the approach that the Tribunal will take to examining the merits of proposed ‘opt-out’ collective actions before allowing such actions to proceed.

At the present time, it remains to be seen whether or not Ms Gibson will take up the opportunity to submit a new economic case for quantifying consumer losses. The judgment notes that there were some 250-300 retailers who regularly sold Pride scooters during the 2-year infringements period, and the number of Relevant Models sold by the Relevant Retailers during that period was 944 (many of which were sold in‑store rather than online or by telephone) .

A copy of the judgment is here.

Monckton barristers Alan Bates, Michael Armitage and Jack Williams are instructed on behalf of Pride.