High Court refers case on treatment in bankruptcy of foreign personal pension schemes to the Court of Justice of the EU.

In a judgment handed down this morning, Nugee J has decided to refer to the CJEU a case concerning the treatment of assets held in a foreign pension scheme by a person who is declared bankrupt in England and Wales. Under English insolvency law, assets held by a bankrupt in a scheme registered in the UK and subject to UK regulation are not counted as part of the bankrupt’s estate and are not available for distribution to creditors. But similar protection does not extend to a bankrupt’s assets held in a personal pension scheme registered in and regulated by an EU Member State and not registered in the UK.

The present case concerned an Irish national who built up assets in an Irish personal pension scheme before moving to England to run a consultancy business. He was then declared bankrupt. The trustees in bankruptcy claimed that his assets in the Irish scheme formed part of the bankrupt estate. The Court noted that although the Irish scheme could in theory have registered in the UK, that was not a decision for an individual beneficiary and would have imposed potentially onerous obligations on the Irish scheme in return for no clear benefit to the scheme. The Court accepted that it was likely that Article 49 of the Treaty on the Functioning of the EU (freedom of establishment) and Article 24(1) of the Citizens’ Rights Directive (equal treatment) required the UK to extend to his assets in the Irish scheme the same provisions excluding those assets from his estate that would have applied were his assets in an equivalent UK scheme. However, the Court had sufficient doubts about the application of Article 49 and the Directive for it to be appropriate to refer the question of whether they applied to the CJEU. The Court also held that if the CJEU agrees that EU law does require the extension of protection to the Irish scheme, UK legislation can be read, using the principle of conforming interpretation, so as to comply with what EU law requires.

It should be noted that although the reference is likely to be made after the UK leaves the EU on 31 January, and to be decided after the likely end of the transition period on 31 December 2020, the Withdrawal Agreement provides that references to the CJEU may continue to be made during the transitional period, that the CJEU will decide such references even after transition, and that the outcome will bind the UK courts. Those provisions will all be implemented into UK law by the Withdrawal Agreement Bill currently awaiting Royal Assent.

George Peretz QC represented the Irish national in the case.

Court of Appeal upholds CMA decision on internet sales bans – Ben Lask acts for CMA

The Court of Appeal has upheld the CMA’s decision that a ban on selling golf clubs online is a serious breach of competition law.

In a judgment handed down on 21 January the Court dismissed an appeal by the golf club manufacturer Ping concerning its longstanding policy banning its authorised retailers from selling its golf clubs over the internet. In a 2017 decision the CMA found that the ban was a restriction of competition by ‘object’ – i.e. a measure that was so inherently likely to harm competition that it was unnecessary to prove any actual effects – and therefore an infringement of both EU and domestic competition law. That decision was upheld by the Competition Appeal Tribunal in 2018 and the Tribunal’s judgment has now been upheld by the Court of Appeal.

The Court’s judgment provides important guidance on the meaning of ‘object’ infringements and suggests that when applying competition law the domestic courts will not look kindly on attempts to restrict the ability of retailers to sell over the internet. Such an approach is consistent with the approach taken so far by the European Commission and the EU Court of Justice.

Ben Lask acted for the CMA in both the Tribunal and the Court of Appeal. A copy of the judgment can be read here.

Anneli Howard represents UK Government in EFTA proceedings successfully defending legality of the UK’s ban on secondary ticketing for Olympics 2012

In a rare reference to the EFTA Court from the Norwegian courts regarding the sale of tickets for the Olympics 2012 Games, the EFTA Court handed down judgment on 18 December 2019 accepting the UK’s arguments that Mr Gyrre’s sale of the tickets was unlawful under EU consumer protection law since he omitted material information about restrictions on the use of the tickets which were void when sold by unauthorised resellers. The EFTA Court ruled that his commercial practices in selling the tickets online were automatically unfair under Annex I of the UCPD – although the consumer obtained their ticket, it was useless and could not be used to gain access to the venue – indeed, consumers could be prosecuted for trespass.

The case also raised wider issues about the compatibility of the UK’s ban on unauthorised resellers with EU/EEA law. Mr Gyrre, a Norwegian, was prosecuted for selling tickets online all over Europe in breach of the Act and claimed the breach was contrary to the freedom of services under the EEA (equivalent to Article 56 TFEU). The UK argued that the UK’s LOCOG Act, which prohibits the resale of tickets by unauthorised sellers, was a non-discriminatory Keck selling rule or was objectively justified to protect consumers and ensure health and safety and national security at stadia. This has ongoing relevance for similar requirements for tickets sales at concerts and large international sporting events.

Mr Gyrre also claimed that his right to challenge the compatibility of the ban took precedence over consumers’ rights and meant that they had suffered no prejudice. The EFTA court held that, although Mr Gyrre might claim the prohibition was in breach of EU/EEA law, that did not affect the position of consumers. The key material time for determining unfairness of the practice and its impact on the consumer’s economic behaviour was the time of the relevant transaction. The EFTA Court upheld the UK’s argument that a subsequent determination could not affect the knowledge of the average consumer at the time of the transaction or alter their position after the event. A consumer could not be expected to know the intricacies of EU law to challenge the invalidity of his/her ticket if/when they were refused entry to the Games.

Anneli Howard represented the UK Government in its written submissions and at the oral hearing in February 2019 – with Zoe Lavery, member of the Government Legal Department, acting as Agent.

Read full judgment here.

FCO defeats civil claims arising out of the conflict in Kosovo in 1999

In Tomanovic & Ors v Foreign and Commonwealth Office [2019] EWHC 3350 (QB), Brendan McGurk successfully defended the Foreign and Commonwealth Office from claims brought by family members of Serbians killed or disappeared following NATO’s airstrikes in June 1999 and the consequent withdrawal of Slobodan Milosovic’s forces from Kosovo. It was common ground that the deaths and disappearances were orchestrated by the Kosovo Liberation Army. A previous claim brought against the Ministry of Defence for the UK’s failure to carry out investigations compliantly with Articles 2 and 3 ECHR was rejected by Irwin J (as he then was) in Kontic & Ors v Ministry of Defence [2016] EWHC 2034 (QB). The claim against the FCO was based on the novel proposition that because the FCO had seconded an employee to the EU’s Rule of Law Mission to Kosovo – a body set up to investigate and prosecute crimes in the aftermath of Milosovic’s withdrawal – his alleged failure to investigate the deaths and disappearances could be attributed to the UK Government. That proposition was rejected in the judgment of Johnson J who further concluded that the Claimants were outside the jurisdiction of the UK for the purposes of Article 1 ECHR and that the claim was an abuse of process in circumstances where these claims could have been pursued as part of the Kontic litigation. Brendan McGurk was led in both Kontic and Tomanovic by Sir James Eadie QC.

The decision of Johnson J is here.

Brendan McGurk wins domestic and EU phytosanitary cases

Member States are required to carry out Official Controls at, inter alia, slaughterhouses to prevent animal disease from entering the human food chain. National Competent authorities (in the UK, the Food Standards Agency) are permitted and in some cases required to charge for the provision of Official Controls. By regulation 4 of the Meat (Official Controls Charges) (England) Regulations 2009, the FSA has the power to withdraw controls from premises in relation to which previous debts for the provision of Official Controls have been accrued by previous operators. The provision is designed to avoid phoenix companies from continuing to receive Official Controls when a related business has failed to pay for the same. In R (OaO Agro Foods (Ashford) Limited) v Food Standards Agency [2019] EWHC 2718 (Admin) Mr Michael Fordham QC (sitting as a Deputy High Court Judge) rejected a challenge to the effect that regulation 4 violated EU charging provisions and/or could not be interpreted as the FSA had sought to do so. The judgment is here.

Relatedly, on 19 December 2019, the CJEU handed down its decision in case C-477/18 Exportslachterij J. Gosschalk and Others v Netherlands, in which the Court confirmed that National Competent authorities were permitted by EU to recover indirect as well as the direct costs of providing Official Controls to Food Business Operators. The ruling precludes domestic restitutionary claims to the effect that the FSA has recovered excessive costs in charging for the provision of Official Controls. The judgment is not yet available in English (the French version is here) but accedes to submissions made on behalf of the UK Government who intervened in support of the Dutch Government.

Brendan McGurk successfully acted for both the FSA in the Agro Judicial Review and the UK Government in the Exportslachterij J. Gosschalk reference.

Rail Franchising procurement litigation: seven Monckton counsel appear in Court of Appeal case

Judgment was handed down this week by the Court of Appeal in the latest turn of the 2019 Rail Franchising litigation. The Secretary of State appealed against the trial judge’s refusal to strike out elements of the Part 7 claims brought by four disqualified bidders in the recent franchise competitions.

The central issue was whether aspects of the claims were now time-barred, having been brought more than three months after the relevant bidding documentation had been issued. At first instance, Stuart-Smith J had held that the claimants’ Francovich damages claims were breaches of statutory duty to which a six-year limitation period applied; moreover, even if the three-month time limit did apply, he would need to hear all the evidence at trial in order to determine the point from which time had run; and finally that it was not necessarily an abuse of process to claim ‘cross-over’ relief in the form of a declaration or injunction in a Part 7 claim that engaged both public and private law rights.

On appeal, the Secretary of State argued that the underlying claim was a public law challenge and consequently a breach of the principle of procedural exclusivity.

Giving the leading judgment, Coulson LJ rejected the Secretary of State’s argument that a damages claim arising out of a public body’s decision should automatically be subject to a three-month time limit, and did not accept that the Part 7 claims were ‘public law challenges’. A claim for damages was not attempting to reverse or alter the public body’s decision, but only to receive compensation for a wrong suffered. As such, there was no condition precedent that a claimant should have brought judicial review proceedings first. Procedural exclusivity did not apply in a private law case when an individual sought to establish private law rights which could not be determined without an examination of the validity of a public law decision. Therefore, where claims for damages were inextricably mixed with public law issues, the judicial review limitation period would not apply. However, it might still be an abuse to seek an injunction aimed at reversing a public law decision where the claim was brought outside the three-month time limit. As to the point from which time ran in the present case for the purpose of the judicial review time limit, while it was possible for a cause of action to arise on the issue of tender documents, if the process was more fluid the claim might only crystallise at a later point, when the tender was rejected. As such, the judge had been correct not to strike out the claims on an interlocutory application. The appeal was accordingly dismissed.

Anneli HowardFiona Banks and Alfred Artley appeared for the Secretary of State (led by Rhodri Thompson QC and Fionnuala McCredie QC).

Philip Moser QC and Jack Williams appeared for Arriva (the first respondent).

Tim Ward QC and Daisy Mackersie appeared for the Stagecoach bidders (the second and fourth respondents).

Judgment in Royal Mail abuse of dominance case with all-Monckton cast list

The Competition Appeal Tribunal has today dismissed Royal Mail’s appeal against a finding by Ofcom that it abused its dominant position to exclude a competitor. The Tribunal’s judgment provides guidance as to the approach for deciding whether conduct is an abuse of dominance. In particular, the Tribunal considered the CJEU judgment in Intel and decided that it is not always necessary to carry out an ‘as efficient competitor’ test before finding pricing conduct to be abusive.

The Ofcom decision against which Royal Mail appealed was taken in August 2018. It concerned changes, notified by Royal Mail to its customers in January 2014, to its pricing scheme for delivering ‘access mail’, i.e. letters collected and sorted by its competitors but handed over to Royal Mail for delivery to final addresses.

The notification of the pricing changes occurred at a time when there was nascent competition in letter delivery from Whistl (then known as TNT Post). Whistl was rolling out its own letter delivery operation, in order to compete with Royal Mail in ‘end-to-end’ delivery. Since Whistl was rolling out letter delivery in only some areas of the UK, it would continue to need to rely on Royal Mail’s letter delivery service in relation to other areas. The pricing changes notified by Royal Mail included the charging of higher prices to customers of its letter delivery service whose ‘profile’, in terms of geographical distribution of mail across all areas of the UK, did not match Royal Mail’s own geographic mail distribution profile.

Whistl put its plans to roll out delivery operations on hold. It ultimately withdrew from end-to-end competition.

Ofcom decided that Royal Mail’s conduct was not competition on the merits, it was liable to impede competition, and thus constituted an abuse of dominance. Ofcom imposed on Royal Mail a fine of £50m.

Royal Mail, in its appeal, contended that the finding of abuse should not have been made, among other matters since Ofcom had not properly considered an ‘as efficient competitor’ test. In that regard, Royal Mail argued that pricing conduct by a dominant enterprise should not be found abusive unless the conduct is shown to be liable to have exclusionary effects on a competitor that is ‘as efficient’ as the dominant enterprise. Royal Mail also contended that its notification of its new pricing structure could not be abusive in circumstances where the pricing changes were suspended, meaning that the new prices were never actually charged or paid.

Whistl, whose complaint triggered the investigation, was permitted by the Tribunal to intervene in the appeal proceedings in support of Ofcom.

By its judgment today, the Tribunal has dismissed Royal Mail’s appeal. The Tribunal also upheld the amount of the fine: the highest fine ever imposed by Ofcom.

All parties to the proceedings – Royal Mail, Ofcom and Whistl – were represented by leading and junior counsel from Monckton Chambers.

Daniel Beard QCLigia Osepciu and Ciar McAndrew appeared for Royal Mail.

Josh Holmes QCJulianne Kerr Morrison and Nikolaus Grubeck appeared for Ofcom.

Jon Turner QCAlan Bates and Daisy Mackersie appeared for Whistl.

The case is attracting widespread media attention: BBC NewsFinancial TimesThe Guardian.

Competition law challenge to Premiership Rugby salary cap rejected – Julian Gregory represented Premiership Rugby

Saracens v Premiership Rugby

An independent panel, chaired by Lord Dyson, has rejected a competition law challenge to Premiership Rugby’s salary cap, and imposed a points deduction of 35 league points and a fine of £5.3m on Saracens rugby club for breaching the salary cap regulations.

The rugby union salary cap is one of several cost control measures introduced in sports leagues in recent years, including the Financial Fair Play (FFP) rules that operate within the UEFA Champions League, the English Premier League and the EFL Championship. Tribunals have previously rejected competition law challenges to those rules brought by QPR and Galatasaray football clubs.

The lawfulness of sporting salary caps, present in a number of rugby and cricket leagues, is topical as the EFL Championship is reported to be considering replacing its FFP rules with a salary cap following the financial crises experienced by Bury and Bolton Wanderers. As well as promoting financial stability by preventing excessive spending on player wages, salary caps can promote a more balanced sporting competition by reducing inequalities in wage levels – and therefore player talent – between clubs.

Saracens, the current Premiership champions, was found to have failed to disclose payments and exceeded the salary cap ceiling in the 16/17, 17/18 and 18/19 seasons. The 35 league points deduction is set to be imposed in the current 19/20 season. Saracens has stated that it will appeal. Premiership Rugby’s press release is here, and BBC Sport coverage is here.

Julian Gregory successfully represented Premiership Rugby in respect of the competition law aspects of the case.

Court of Appeal rules that social housing legislation does not breach human rights – Ben Lask acts for Secretary of State

Simawi v (1) London Borough of Haringey (2) Secretary of State for Housing, Communities and Local Government [2019] EWCA 1770

The Court of Appeal has upheld the statutory rules governing the right to take over a social housing tenancy when the former tenant dies, in the face of a challenge under Article 14 of the European Convention on Human Rights (ECHR): Simawi v (1) London Borough of Haringey (2) Secretary of State for Housing, Communities and Local Government [2019] EWCA 1770.

The Appellant’s mother was the secure tenant of a property owned by the local authority. She had succeeded to the tenancy automatically upon the death of her husband in 2001 and, since she was therefore a “successor” for the purposes of the Housing Act 1985, the Appellant was unable to succeed to the tenancy when his mother died in 2013. The 1985 Act allows for only one statutory succession before the property reverts to the local authority for reallocation to others in need of accommodation. In certain circumstances, however, a tenancy can pass from one person to another without the one statutory succession being “used up”. An example is where it is assigned by the Court in divorce proceedings, the result being that the son of a secure tenant who had acquired the tenancy upon divorce could (unlike the Appellant) succeed to the tenancy when his mother died.

The Appellant had resisted a claim for possession brought by the local authority, arguing that the rules on succession discriminated unlawfully between the children of widows and the children of divorcees, such that they contravened Article 14 of the ECHR, in conjunction with Article 8. Since he sought a declaration of incompatibility under the Human Rights Act 1998, the Secretary of State was joined to the proceedings.

The High Court had rejected the Appellant’s case in 2018 and, in a judgment handed down on 31 October 2019, the Court of Appeal reached a similar conclusion. The Court accepted the Secretary of State’s case that (1) the treatment complained did not arise from a protected status under Art. 14; (2) there was no indirect discrimination against women; and (3) in any event, the statutory rules were objectively justified. In particular, since the rules ensured that the one succession rule did not act as a deterrent to divorce, including in cases of domestic abuse, they satisfied the relevant test for justification (i.e. they were not “manifestly without reasonable foundation”). As a result, the Appellant’s appeal was dismissed.

Ben Lask successfully represented the Secretary of State in both the High Court and Court of Appeal.

The judgment can be read here.

Philip Moser QC and Ewan West act in first Concessions Contracts case

Ocean Outdoor v London Borough of Hammersmith & Fulham [2019] EWCA Civ 1642

The Court of Appeal has given judgment in Ocean Outdoor, the first case turning on the Concessions Contract Regulations 2016 (“the CCRs”). The lead judgment was given by Coulson LJ, formerly the presiding judge in the TCC which is the preferred jurisdiction for public procurement cases and from which this was an appeal. The judgment is remarkable in at least four principal respects: first, it delineates the ambit of the CCRs by providing a judicial definition of what constitutes a relevant ‘concession’ for these purposes; secondly, in a finding with significance for procurement cases across the board, it confirms O’Farrell J’s decision below that in order for there to be a public contract it must be one for the benefit of the contracting authority “in respect of its public obligations”; thirdly, the CofA ruled on the land transaction exemption, again for the first time in a case where it was directly in issue, giving it a fairly wide ambit, and finally the CofA gave important guidance on damages in public procurement cases, both as to the Francovich conditions (where mere breach of the Regulations, even the OJEU advertising requirement, will not suffice to render it a “sufficiently serious breach”) and on the applicability of the “loss of a chance principle” to procurement damages claims.

Read full judgment here.

Read case study by Alfred Artley.

Philip Moser QC and Ewan West appeared on behalf of the Appellant, Ocean Outdoor.