In the Merchant Interchange Fee Umbrella Proceedings, the CAT has today handed down its judgment on the “Volvo limitation issues”: [2023] CAT 49. Those issues were, principally: (i) did the CJEU find in Case C-267/20 Volvo that, as a matter of EU law, limitation did not begin to run against a claimant with a competition law damages claim until the relevant infringing activity ceased; and (ii) if so, should the CAT follow Volvo (which was handed down after 31 December 2020 or Implementation Period Completion Day / “IPCD”)?

The CAT’s judgment is of very wide significance because it represents the first explicit analysis in UK domestic law of the effect that the EU (Withdrawal) Act 2018 (“EUWA”) has had upon rights accrued under EU law prior to IPCD, and in particular of whether post-IPCD EU judgments are binding on UK courts adjudicating on such rights.

The Tribunal unanimously concluded, as to question (i) above, that CJEU in Volvo had made no binding finding on limitation in any event. However, this point remains under consideration by the CJEU in other cases.

Of wider importance in the UK, however, are the Tribunal’s responses to question (ii) which settle, in the negative, any argument as to whether post-IPCD EU judgments have binding effect in relation to rights accrued under EU law before IPCD.

On that issue, the merchant claimants argued that claims in respect of facts occurring before 31 December 2021 represented “accrued rights”, which ought to have been unaffected by Brexit, including as to the binding effect of post-IPCD EU judgments [50]-[51].

However, in the judgment of the majority (Marcus Smith J and Ben Tidswell), Parliament, by its enactment of EUWA, effected the “translation” of all rights, claims and remedies that had existed under EU prior to 31 December 2021 into rights, claims and remedies under retained EU law (i.e. domestic law), which are now preserved by virtue of section 4(1) of EUWA.

As majority put it, the UK’s “entire legal order has undergone a paradigm shift” [69(2)], and the preservation of accrued rights in an unchanged legal form would have been “inconsistent with what Parliament intended” by Brexit [69(1)].  Importantly, section 16 of the Interpretation Act 1978 had not been triggered to preserve those rights because no enactment under which they had substantively accrued had been repealed. Rather, in the majority’s analysis, the precise effect of the repeal of the European Communities Act 1972 had been to close a “gateway” through which substantive EU law rights had previously flowed into domestic law [69(3)].

Roth J’s concurring minority judgment did not agree that section 4(1) of EUWA was the mechanism by which accrued rights were converted into rights under retained EU law, noting that “[s]omewhat surprisingly, the 2018 Act does not set out a clear answer” as to what that mechanism was [101]. Nonetheless, Roth J considered that “the statutory scheme, considered as a whole, indeed has, in effect, converted or ‘translated’ rights which had accrued under EU law into rights under retained EU law, save insofar as it otherwise expressly provides” [102].

Ronit Kreisberger KC, Philip Woolfe, and Antonia Fitzpatrick, with Oliver Jackson at 11KBW, acted on behalf of a group of merchant claimants, instructed by Stephenson Harwood LLP.

Anneliese Blackwood with Nicholas Saunders KC and Aidan O’Neill KC appeared on behalf of the Class Representative in the Merricks Proceedings instructed by Willkie Farr & Gallagher (UK) LLP.

The judgment is available here.

The Supreme Court today has upheld a challenge to funding agreements relied on in collective proceedings before the Competition Appeal Tribunal.  The agreements sought to fund collective proceedings against truck manufacturers relating to the European Commission’s Trucks infringement decision in return for a share of any damages if the claims succeed.

The Supreme Court accepted Paccar and DAF’s argument that such agreements fall within the statutory definition of “claims management services” and “damages-based agreements”.  As a result, they are unenforceable in opt-out proceedings and unenforceable in opt-in proceedings unless they comply with the Damages-Based Agreement Regulations 2013. The Supreme Court overturned earlier rulings by the Competition Appeal Tribunal and Divisional Court.

The decision is likely to have far reaching consequences for the litigation funding industry as a whole.

Click here to read more on the Supreme Court website.

Rob Williams KC and David Gregory acted for the Appellants.

 

The Court of Appeal has today handed down judgment in various appeals against the CAT’s judgment of 8 June 2022 ([2022] CAT 25) in the Trucks collective proceedings.

In its judgment, the CAT granted an application for a collective proceedings order (CPO) by the Road Haulage Association (RHA), authorising it to act as the class representative on behalf of both new and used truck purchasers in claims against the five truck manufacturers who were the addressees of the Commission’s Settlement Decision in Case 39824 – Trucks. By the same judgment, the CAT dismissed an application for a CPO brought by UK Trucks Claim Limited (UKTC).

The key issue for the Court of Appeal was whether the CAT erred by authorising the RHA to act as the class representative for both new and used truck purchasers. The appellants (MAN, DAF and UKTC) argued that the inclusion of both sets of purchasers gave rise to a conflict of interest, because used truck purchasers would want to argue for a high level of resale pass-on, while new truck purchasers would want to minimise the extent to which any overcharge they faced was passed on by arguing for a low level of resale pass-on.

The Court of Appeal found errors in the CAT’s approach to the conflicts issue: contrary to the CAT’s judgment, the presence of both types of purchaser gave rise to an actual conflict, which needed to be addressed at the start of the proceedings, not left to a later stage. The Court therefore directed that the matter be remitted to the CAT for it to give directions to manage the conflict, including by way of separate representation and funding.

The Court of Appeal rejected UKTC’s other grounds of appeal, which argued that its application should have been preferred over that of the RHA, and that the CAT made errors in its assessment of the UKTC application. However, it acceded to UKTC’s request that its application be stayed pending final resolution of the conflict issue in the RHA application.

Finally, the Court of Appeal dismissed arguments by Daimler and Iveco that the CAT’s judgment should be upheld for the different reason that UKTC’s application had failed to satisfy the eligibility requirement in section 47B(5) of the Competition Act 1998, as the matters raised fell within the Tribunal’s area of discretion and did not amount to errors of law.

Meredith Pickford KC and Nikolaus Grubeck (instructed by Travers Smith LLP) acted for DAF.

Paul Harris KC, Ben Rayment, Michael Armitage and Alexandra Littlewood (instructed by Macfarlanes LLP) acted for Daimler.

 

 

 

The Competition Appeal Tribunal (“CAT”) has dismissed a judicial review challenge against the CMA’s decision to reject a novel merger remedy proposed by a provider of cloud-based services for property transactions.  In a judgment issued on 10 July 2023, the CAT dismissed all three grounds of challenge advanced by Dye & Durham (“D&D”), holding that the CMA was entitled to be concerned about the impact that the proposal could have on competition between the merging parties.

In August 2022, the CMA blocked the merger between D&D and TMG, both of whom provide property search report bundles in England and Wales, ordering D&D to sell TMG to an independent approved purchaser.  D&D agreed and provided final undertakings to the CMA in October 2022.  Half-way through the sale process, however, D&D sought the CMA’s approval for a novel process whereby TMG would be divested to D&D’s shareholders and then listed for sale on the AIM stock exchange.  The rationale for the proposal was to maximise the price that could be obtained for TMG in light of a perceived downturn in the UK property market since the final undertakings were given.

The CMA rejected the proposal, finding that:

1. It would require a variation to the final undertakings, which envisaged a private sale to a single approved purchaser.
2. No such variation was justified.
3. In any event, the proposal would result in D&D and TMG having identical shareholders, which would compromise their incentive and ability to compete.

D&D challenged each of those findings before the CAT, but the CMA’s decision was upheld in its entirety.  The CAT’s observations on the impact of common shareholdings on competition will be of particular interest for practitioners and economists.  This is a hot topic in competition circles and has generated a considerable amount of literature both in Europe and the USA.  Whilst the CAT acknowledged that this was a matter of ongoing debate, it held that it was reasonable for the CMA to conclude that there were competition risks in light of market conditions and in circumstances where the 100% overlap between the shareholders could well reduce incentives to compete.  The CAT confirmed that it was not incumbent on the CMA to obtain its own empirical evidence in relation to the impact of common shareholdings.

The CMA was represented by Ben Lask KC and Thomas Sebastian.  A copy of the judgment is here.

The Secretary of State for Health & Or v Servier Laboratories Limited & Ors

The Court of Appeal has dismissed an appeal by Servier against a landmark judgment given by the High Court in 2022.

The High Court’s judgment represented a major victory for the NHS in claims which it has brought against Servier for serious infringements of competition law, in relation to the sale and supply of the blood pressure drug perindopril (brand name Coversyl).

Those claims concern actions between 2005 and 2007, in which Servier entered into “pay for delay” agreements with generic drug manufacturers, under which the generics companies agreed not to enter the market for supplying perindopril. The NHS claimants allege that, as a result of Servier’s conduct, they paid hundreds of millions of pounds more for perindopril than they would otherwise have paid, and claim damages for the difference. The question of whether Servier’s conduct infringed competition law is awaiting final determination by the CJEU.

Pending the conclusion of the CJEU proceedings, the High Court judgment dealt with the preliminary issue of whether, as Servier argued, any damages recoverable by the NHS should be reduced as a result of the NHS’s failure to take steps to avoid buying Coversyl, and instead purchase cheaper generic alternatives. Mr Justice Roth rejected Servier’s arguments in their entirety, commenting that “a disinterested observer might find it surprising that such arguments would, or could, be advanced by a defendant found to have committed a very serious infringement of competition law”.

Servier appealed to the Court of Appeal, arguing that Roth J had erred in dismissing all of its case on the preliminary issue without fuller disclosure being given by the NHS claimants.

In a judgment handed down this week, the Court of Appeal unanimously dismissed Servier’s appeal, finding that “Servier’s contentions on this appeal…run entirely counter to the basis on which the [preliminary issue] trial was directed and maintained”.

The Court of Appeal’s judgment represents a further victory for the NHS claimants in this long-running litigation. It is anticipated that a full trial to determine the level of damages due to the NHS claimants will be listed following the conclusion of the European proceedings, in which a final judgment is expected later this year.

The Court of Appeal’s judgment can be found here.

Jon Turner KC and Josh Holmes KC acted for all of the NHS bodies.

Philip Woolfe (instructed by Peters & Peters Solicitors LLP) acted for the English health authorities.

Julian Gregory  (instructed by RPC LLP) acted for the Scottish / NI health authorities.

Laura Elizabeth John and Ciar McAndrew (instructed by Geldards LLP) acted for the Welsh health authorities.

R (oao Glint Pay Services Ltd) v HMRC [2023] EWHC 1621 (Admin), judgment of 30 June 2023

The Administrative Court (Sir Ross Cranston, sitting as a Judge of the High Court) has dismissed Glint Pay Services’ claim for judicial review of a decision of HM Revenue & Customs that its supplies of gold were not to be treated as zero-rated, rather than exempt, for the purposes of VAT.

Glint makes available to individual members of the public the ability to buy, hold and sell London Bullion Market-accredited gold (see Home | Buy, Save & Spend Physical Gold (glintpay.com)). Glint does this by way of a bespoke app, which operates and interacts with the Mastercard system and which enables clients to buy and sell gold from and to Glint, in the form of fractional/proportional shares of gold bars. The client’s purchases, sales and ownership of gold are recorded in the app. Glint in turn buys and sells gold from and to a member of the London Bullion Market Association (LBMA). At all times, the gold itself remains held securely in the vault of another LBMA member in Zurich.

In the course of Glint’s application for approval of a Partial Exemption Special Method, HMRC indicated that Glint’s sales to clients were exempt supplies of investment gold pursuant to Group 15 of Schedule 9 to the Value Added Tax Act 1994 (“the Investment Gold Exemption”) and that, consequently, Glint could not deduct input tax attributable to those supplies. Glint appealed HMRC’s decision to the First-tier Tribunal, but later withdrew. Consequently, Glint’s supplies were – definitively- exempt as a matter of VAT law. Glint also challenged HMRC’s decision by way of judicial review, claiming it had a legitimate expectation that its supplies would be zero-rated under the VAT Terminal Markets Order 1973 (TMO), based on statements in a 2013 Memorandum of Understanding between HMRC, the LBMA and the London Platinum and Palladium Market (MOU).

The High Court dismissed the claim, holding that the MOU did not state, in terms that were “clear, unambiguous, and devoid of any relevant qualification”, that Glint’s supplies of gold could benefit from any additional carve-out from the Investment Gold Exemption in addition to that provided by the TMO. Glint’s innovative transactions did not fall within the MOU’s terms. Glint accordingly had no legitimate expectation to be taxed otherwise than in accordance with the law.

The High Court further held that it would not have been “conspicuously unfair” or an abuse of power to frustrate any legitimate expectation Glint might have had, and there was no justification to override the public interest in HMRC’s collecting VAT in accordance with what the law clearly provided, especially given that neither Glint nor its advisers had sought HMRC’s clarification as to the possible application of the MOU.

Andrew Macnab acted for HMRC.

Read the Court’s judgment here.

Robert Hammond, a former solicitor and consumer rights advocate for over 20 years, has filed an application for an opt out Collective Proceedings Order before the Competition Appeal Tribunal.

By his application Mr Hammond seeks to act as the Class Representative for the claims of a large class of UK consumers. He alleges the class members have in aggregate suffered a substantial loss as the result of an alleged abuse of a dominant position by entities in the Amazon group of companies through the manner in which product offers were selected for display in the so-called “Buy Box” on Amazon’s online marketplace in the UK.

The proposed claim by Mr Hammond is the second application for a Collective Proceedings Order to have been issued in the Tribunal against Amazon in relation to similar allegations. An earlier application was issued by Julie Hunter. At a case management conference on 28 June 2023 the Tribunal’s President, Sir Marcus Smith, directed that the issue of which Class Representative should have carriage of the claims should be determined in the Autumn as a preliminary issue prior to the determination of the issue of certification (i.e. whether the proposed claim meets the necessary legal conditions to proceed). In the recent FX claims brought by the O’Higgins and Evans Class Representatives the Tribunal determined that carriage and certification should be heard together. That case is currently on appeal to the Court of Appeal. In the present case the President decided that the approach in the recent case of Claudio Pollack v Alphabet Inc. and Others [2023] CAT 34, Case No 1572/7/7/22 should be followed and that the issue of carriage, namely which class representative will better represent the interests of the class, should be determined before the issue of certification. He emphasised that the Tribunal is conscious that, at the stage of a carriage dispute, it should neither pre-determine nor appear to pre-determine issues that would arise at the later stage of certification, since this might give rise to a sense of grievance on the part of the proposed defendant, Amazon.

Philip Moser KC and Ben Rayment are instructed on behalf of Robert Hammond.

Jon Turner KC and Ciar McAndrew are instructed on behalf of Amazon.

The Court of Appeal today handed down judgement in R (AAA and ors.) v SSHD [2023] EWCA Civ 745. It found that the policy of the Secretary of State for the Home Department to relocate certain asylum seekers to Rwanda was unlawful.

The judgment is available here.

It has received extensive media coverage, including by the BBC, CNN, the Financial Times, the Guardian, and the Telegraph.

Nikolaus Grubeck and Julianne Kerr Morrison, instructed by Freshfields Bruckhaus Deringer LLP, acted for Freedom from Torture, who intervened in support of the successful appellants.

The Divisional Court (Popplewell LJ and Henshaw J) has issued judgment in a challenge by Campaign Against Arms Trade (“CAAT”) to the Secretary of State’s decision to continue granting licences for the export of arms to the Kingdom of Saudi Arabia.

The claim brought by CAAT challenged the Secretary of State’s decision, of July 2020, to continue to grant licences for the export of arms and military equipment to the Kingdom of Saudi Arabia for use in Yemen.  The Secretary of State is obliged to cease granting new licences and suspend existing licences where there is “a clear risk that the arms might be used in the commission of a serious violation of International Humanitarian Law (“IHL”)”.

The Secretary of State’s most recent decision was made following an earlier judgment by the Court of Appeal in which it found that the Secretary of State had erred by failing to assess whether, in individual instances, the Saudi Coalition may have been responsible for violations of the laws of war in past incidents.

The Secretary of State had found that the clear risk test was not met because there was no pattern of previous violations.  CAAT challenged the decision on 4 grounds. First, that there was no proper evidential basis for the Secretary of State’s conclusion that there had only been a limited number of IHL violations. Second, that there was no proper evidential basis for the Secretary of State’s conclusion that there was no pattern of IHL violations. Third, that irrespective of the existence of a pattern, there was no proper basis for concluding that Criterion 2c was not engaged, given the alleged record of past violations. Fourth, that the Secretary of State misdirected herself as to the meaning of “serious” violations and failed to consider whether officials in KSA enjoyed impunity for serious violations.

The Court found that the Secretary of State has a wide margin of discretion in reaching judgments on matters going to each of the four grounds of challenge and that the decision-making process could not be characterised as meeting the high threshold of irrationality in this context.

Conor McCarthy was junior counsel for CAAT, instructed by Leigh Day.

Michael Armitage was counsel for Oxfam, which intervened in the proceedings.

The Competition Appeal Tribunal today handed down a judgment in the Pollack v Google collective proceedings claim – which alleges that Google abused its dominant position in online advertising markets to the detriment of online publishers.

Since the Pollack claim was filed in November 2022, a rival opt-out collective proceedings claim (Arthur v Google) brought on behalf of a similar class and containing similar allegations of abuse was filed on 29 March 2023, giving rise to a potential carriage dispute.

The issue facing the Tribunal was whether it should determine the carriage dispute in an earlier, separate hearing, or in a combined carriage and certification hearing – the approach previously adopted in the FX and Trucks collective proceedings claims.

The Tribunal determined that carriage should be determined first (this autumn), with a certification hearing for the successful claim to follow early next year.

The judgment contains the following comments of wider relevance to the case management of collective proceedings claims where a carriage dispute arises.

1. The decision to hold a combined hearing in FX was influenced by the fact it was the first time the Tribunal had considered carriage issues. Determining carriage first can produce significant cost savings and that approach is likely to be appropriate for most carriage disputes.
2. Rival PCRs should co-operate to ensure that a carriage hearing is listed as soon as possible. There is no need for listing to wait until all foreign proposed defendants have been served.
3. Proposed defendants should not – save to assist the Tribunal – be entitled to have much of a say in carriage hearings, i.e. in picking the party that will be litigating against them. Indeed, proposed defendants do not have to participate in the carriage hearing at all unless they want to.
4. In determining carriage, the question of which PCR was ‘first to file’ is not determinative. On the other hand, where a PCR has spent time and money in framing a carefully considered, standalone, claim, some credit ought to be given for filing first – and the longer the delay before the second claim is filed, the harder it will be to displace the first applicant.

Julian Gregory, instructed by Humphries Kerstetter LLP, represented Mr Pollack at the hearing.  Ronit Kreisberger KC is also instructed.

Meredith Pickford KC, instructed by Herbert Smith Freehills LLP, represented Google.

Gerry Facenna KC, Nikolaus Grubeck and Alison Berridge, instructed by Hausfeld & Co LLP, represented Mr Arthur.