JUSTICE Publishes Second Edition of Its Guide to Third Party Interventions in the Public Interest

JUSTICE has published the second edition of To Assist the Court, its guide to the conduct of third party interventions in the public interest. In his Foreword, Lord Philips of Worth Matravers describes it as an “invaluable and detailed guide to intervention”.

This is the second edition of the report written in 2009 by Eric Metcalfe, and contains details of the new costs rules for interveners under the Criminal Justice and Courts Act 2015. The second edition was published with the support and involvement of Freshfields Bruckhaus Deringer.

A copy of the second edition is now available and the JUSTICE press release can be found here.

UK’s first ‘opt-out’ collective action begins

The Consumer Rights Act 2015 introduced a new procedure for bringing ‘collective actions’ for damages for breaches of competition law. Claims can be brought by a claimant 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 breach. Such claims can now be brought on an ‘opt-out’ basis, so that, for example, everyone who purchased a particular product during a particular time period will be part of the proceedings unless he or she actively chooses to ‘opt out’.

In order to bring an opt-out collective action, the claimant must seek a ‘collective proceedings order’ from the Competition Appeal Tribunal. The defendant is not required to file a defence unless and until such an order has been granted.

Press articles in March 2016 announced that the UK’s first opt-out collective action proceedings had been begun by a Ms Dorothy Gibson (the General Secretary of an unincorporated association calling itself the National Pensioners’ Convention) against Pride Mobility Products Ltd (‘Pride’). At that time, however, no proceedings had actually been issued, though Ms Gibson’s solicitors had sent Pride a pre-action letter.

The claim has now been issued: it was issued on 25 May 2016 and served on Pride’s solicitors on 14 June 2016.

Pride is an Oxfordshire-based distributor of mobility scooters. In May 2014 the Office of Fair Trading (‘OFT’) issued a decision finding that Pride and eight of its retailer customers had infringed the Chapter I prohibition in the Competition Act 1998. They did so by agreeing that the retailers would not advertise below-RRP prices on the internet for certain models of scooter. 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 decision did not include any finding as to whether consumers had suffered any financial losses.

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 period covered by the infringement. If the Tribunal grants her the collective proceedings order she is seeking, she would then need to advertise the claim so that any consumers who did buy a scooter in that period could exercise their right to ‘opt out’.

Pride has today filed its Acknowledgment of Service stating that it intends to contest the application for a collective proceedings order and also to defend against the claim in full. The Tribunal is likely to list an initial case management conference in the near future at which it will then set a date for the hearing of the application for a collective proceedings order.

These proceedings will be followed with great interest by UK competition lawyers. As this is the first claim of its kind in the UK, the Tribunal will need to consider novel questions as to the principles it should apply when deciding whether or not to grant a collective proceedings order. As part of that consideration, the Tribunal may choose to draw on the jurisprudence of other common law countries that have a longer history of operating class action procedures.

If the claim is allowed to proceed beyond that stage (i.e. if a collective proceedings order is granted), then the Tribunal would need to go on to grapple with complex factual and economic issues concerning the identification and quantification of consumer losses flowing from vertical arrangements relating to how goods are advertised online. This is a topical area in light of the recent focus by competition regulators in the UK and across the EU on online sales restrictions of many and various forms.

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

Michael Armitage appears for successful Claimant in landmark High Court case on unlawful detention of children

In a landmark judgment handed down today, the High Court has ruled that it is unlawful for the Secretary of State for the Home Department (“SSHD“) to detain children under her immigration powers for any longer than 24 hours, irrespective of whether the relevant immigration official has reasonable grounds for suspecting the prospective detainee to be an adult: R (AA) v SSHD [2016] EWHC 1453 (Admin). The judgment is significant in that it is the first judicial consideration of the 2014 amendments to the Immigration Act 1971, which (as this case confirms) dramatically alter the previous state of the law on the lawfulness of child immigration detention.

The case was brought on behalf of a Sudanese asylum seeker, AA, who was detained by the SSHD for 13 days under her general powers of detention in paragraph 16 of Schedule 2 to the 1971 Act. The detention was said to be justified in accordance with Chapter 55 of the Enforcement Instructions and Guidance, the well-known Home Office policy which permits the detention of individuals claiming to be children but whose physical appearance / demeanour “very strongly suggests that they are significantly over 18 years of age and no other credible evidence exists to the contrary“. While AA was in detention, a local authority that had conducted a Merton “age assessment” concluded that AA was a child, and AA was eventually released on the basis of that assessment, there no longer being any basis under the SSHD’s policy for maintaining the detention.

AA contended in the proceedings that he had been unlawfully detained, notwithstanding that his detention had been in accordance with the terms of the SSHD’s policy. Notably, the Supreme Court held in 2013 (in R (AA (Afghanistan)) v SSHD [2013] UKSC 49) that the detention of a child in the mistaken but reasonable belief that he was an adult was not contrary to that policy, or to the general duty to safeguard and promote the welfare of children in section 55 of the Borders, Citizenship and Immigration Act 2009. However, after judgment in that case had been handed down, Schedule 2 to the 1971 Act was amended so as to subject the SSHD’s general powers of immigration detention to express statutory restrictions in the case of unaccompanied children: see paragraph 18B of Schedule 2 to the 1971 Act, which provides that unaccompanied children may only be detained in short-term holding facilities, and even then only for a maximum period of 24 hours. The word “child” is defined in paragraph 18B(7)in entirely objective terms as “a person under the age of 18“.

In a careful and detailed judgment, Sir Stephen Silber rejected the SSHD’s submission that the word “child” in paragraph 18B of Schedule 2 to the 1971 Act should be read so as to incorporate reference to the reasonable beliefs of the immigration official. “Child” had to be interpreted objectively, as a matter of “precedent fact” just as it had been in the seminal Supreme Court case of R (A) v Croydon [2009] 1 WLR 2557 in the context of local authorities’ duties to “children in need” under the Children Act 1989. It followed that the Claimant’s detention was unlawful, it being accepted that he was unaccompanied, and under 18 years old, at the time of his detention. It followed that AA’s detention was unlawful from the outset (with damages to be assessed in due course). In addition, the Judge held that even if (contrary to his findings on the main ground of judicial review) the SSHD could lawfully detain AA on the basis of a reasonable belief that he was an adult, AA’s detention was in any event unlawful from the date on which the SSHD received the local authority’s age assessment confirming the Claimant to be a child.

The judgment constitutes an extremely important development with the potential to have far-reaching implications for the detention of asylum-seeking young people. Permission to appeal to the Court of Appeal has already been granted by Sir Stephen Silber and judicial review practitioners will await the outcome of the appeal with interest. For now, however, the law is straightforward: individuals under 18 cannot lawfully be detained under immigration powers (i) for any longer than 24 hours or (ii) in adult immigration removal centres for any length of time. The SSHD’s beliefs about individual’s age are irrelevant.

Michael Armitage, instructed by Stuart Luke of Bhatia Best, appeared as sole counsel for the successful Claimant.

High Court orders NHS England to fund narcolepsy drug

Mr Justice Collins has handed down judgment in R (S) v NHS England, a claim in relation to the refusal by NHS England to fund the narcolepsy drug sodium oxybate (Xyrem) for a 17 year old girl. S was represented by Ian Wise QC and Stephen Broach, instructed by Hodge Jones and Allen.

At the conclusion of the hearing on 4 May 2016 the Judge made an interim order requiring NHS England to fund a three month trial of sodium oxybate. The judgment handed down today gives the Judge’s reasons for overturning the refusal of funding. In essence, the Judge found that NHS England erred in rejecting an ‘Individual Funding Request’ made on the basis that S had an exceptional need for the medication.

The Judge held that ‘a decision to refuse the treatment could not be supportable’ and that ‘this is a very rare case in which the decision making has gone wrong.’ There were failures by the Defendant to have regard to all the matters raised by the Claimant’s treating clinician and an ‘altogether too restrictive application of exceptionality’.

The full judgment is available here.

Please see article here.

 

Thomas Sebastian speaks at BIICL on the Trade Implications of Brexit

Thomas Sebastian spoke at a British Institute of International and Comparative Law event titled “10 Days, 10 Issues – Countdown to the Brexit Referendum” on 14 June 2016.

Thomas discussed the trade implications of Brexit.

Thomas covered what was known, and unknown, about the likely shape of the UK’s post-Brexit trading arrangements with: (1) the EU itself; (2) countries which already have bilateral trade agreements with the EU; and (3) other WTO Members.

Thomas is well-placed to deal with this topic given his expertise in WTO law and EU law as well as his familiarity with the dynamics of international trade negotiations.

Other speakers dealt with Constitutional Arrangements, Foreign Relations, Agriculture, Immigration, Free Movement of Persons, Consumer Rights, Financial Services, Civil Justice and Human Rights.

 

Court of Appeal reinstates Samsung’s case on non-discrimination and FRAND

On Friday 27 May, the Court of Appeal handed down an important judgment on the interplay between competition law and the licensing of essential patents.

This is part of a landmark patent infringement case where Unwired Planet, a “patent assertion entity” that has acquired from Ericsson certain “standard essential patents” (“SEPS”) used in smartphones and network equipment, has sued Samsung, Google and Huawei for infringing the SEPS (Google has largely settled out).

Ericsson continues to derive licensing income from the patent assertion entity, on an ongoing basis.  Among other things, it is contended that Ericsson is seeking to circumvent its own obligations to license its patents on Fair Reasonable and Non Discriminatory (“FRAND”) terms by using a “privateer”.  Ericsson has been joined to the action.  Samsung and Huawei have raised various competition law defences, under Articles 101 and 102 TFEU.

In the High Court, Birss J. struck out one of Samsung’s Article 101 TFEU defences.  This related to the complaint about the effectiveness of the transfer from Ericsson of its obligation to license essential patents on FRAND terms.  Samsung argued, among other things, that the content of Ericsson’s original “non-discrimination” obligation would be circumvented by Ericsson transferring the patents to the patent assertion entity, without the new entity needing to have regard to Ericsson’s duty of non-discrimination.  The High Court ruled that this contention should be struck out: it was enough for Unwired Planet to make a fresh FRAND declaration of its own.

The Court of Appeal has overruled the High Court on this issue.  It has accepted that Samsung has an arguable case that the arrangement whereby Ericsson transferred the SEPs to Unwired Planet is in breach of Article 101 TFEU and void because of the failure to ensure that Unwired Planet would respect the non-discrimination aspect of Ericsson’s FRAND obligation.  It upheld the Judge on another aspect of the complaint, however, which related to whether the transfer of the patents had given prospective licensees the same enforceable rights to insist on FRAND terms as such persons used to have against Ericsson, when Ericsson owned and licensed the patents directly.

In his judgment, Lord Justice Kitchin (with whom Lord Justice Tomlinson and Sir Timothy Lloyd agreed) recognised that this is a developing area of the law which has received recent attention from the Court of Justice of the EU and the European Commission.  He accepted Samsung’s argument that it has a realistic prospect of persuading the trial judge that it would be anti-competitive for Unwired Planet to be able to charge licence fees which are significantly higher than those which Ericsson itself charged and which would have been discriminatory having regard to Ericsson’s existing licensees had Ericsson sought to charge them directly.  He recognised that these higher licence fees could distort or restrict competition in downstream markets to the detriment of consumers.

Lord Justice Kitchin also accepted the inter-relationship between Samsung’s non-discrimination argument and its other competition law defences, in particular the argument that Ericsson strategically sold part of its portfolio of essential patents to Unwired Planet, while keeping a close ongoing involvement in the monetization of those patents.  He considered that Samsung has an arguable case that Ericsson has sought to circumvent its own FRAND obligation and simultaneously benefit from the increased licence fees.

Samsung’s various competition law arguments will be considered at the 13 week trial, due to commence in October 2016.

Samsung is represented by Jon Turner QC, Meredith Pickford QC, Laura Elizabeth John and James Bourke.

The full judgment is available here.

High Court rules that Asian sales are outside EU competition law and dismisses CRT claims

Iiyama Benelux BV & Ors v Schott AG & Ors

Mr Justice Mann has dismissed claims brought by iiyama in respect of cartels concerning Cathode Ray Tubes (CRTs) and CRT Glass, on the basis that the claims fall outside the territorial scope of EU competition law. The claimants were subsidiaries of iiyama, mostly based in Europe, and alleged that they had purchased completed computer monitors which incorporated CRTs and CRT Glass and which had been subject to cartels. The claims relied on EU competition law, and were initially brought on the basis of two infringement decisions made by the European Commission in relation to CRTs and CRT Glass respectively. However, it later transpired that the CRTs and Glass which were ultimately purchased by the claimants had originally been sold in Asia, and only arrived in Europe through a supply chain with a number of intervening stages.

The Defendants (who were variously parties to the Commission’s decisions relating to CRTs and CRT Glass) applied to have the claims struck out, or for summary judgment, or to have permission to serve out of the jurisdiction set aside, all on the basis that the claim was not properly arguable.

Mann J found that the claim against the Glass Defendants failed because the cartel found by the Commission related only to Europe, and did not cover supplies of CRT Glass in Asia. It was not possible to see how the EU cartel affected sales in Asia, and although the claimant alleged that there might be a worldwide cartel, no such cartel had been found by the Commission, and no such cartel was pleaded.

The Court also found that the claims against both the CRT and Glass defendants fell outside the territorial scope of EU competition law, considering two doctrines of EU law – the implementation doctrine and the qualified effects doctrine. The claimants could not rely on the implementation doctrine, which required that the cartel was implemented in the EU because the relevant sales of Glass and CRTs had been made in Asia. The claimants also could not rely on the qualified effects doctrine – i.e. that the cartel had foreseeable, immediate and substantial effects in the EU – because the supply chain by which they had acquired the products was not immediate.

Tim Ward QC and Rob Williams acted for Schott instructed by Travers Smith LLP. Daniel Beard QC acted for Samsung SDI instructed by Allen & Overy LLP.

The full judgment is available here.

Court of Justice confirms validity of the new Tobacco Products Directive and rejects challenges to e-cigarette provisions and menthol cigarettes ban

Case C-547/14 R (Philip Morris Ltd and others) v Secretary of State for Health

Case C‑477/14 Pillbox 38 (UK) Ltd v Secretary of State for Health

Case C‑358/14 Poland v Parliament and Council

On 4 May 2016, the Court of Justice of the European Union delivered its judgments in three cases concerning the Tobacco Products Directive (Directive 2014/40/EU). The revised Directive was adopted in April 2014 and provides for a wide range of restrictions concerning tobacco packaging, flavouring and e-cigarettes.

In Philip Morris, a preliminary reference from the Administrative Court, the Court held that the Article 24(2) of the Directive permitted Member States to maintain or introduce further requirements in relation to aspects of the packaging of tobacco products which were not harmonised by the Directive and that was consistent with Article 114 TFEU, which was to be regarded as the correct legal base for the Directive.  The Court rejected arguments by the tobacco companies that the Directive was a disguised public health measure.  It held that the EU Legislator was permitted to use the internal market approximation base under Article 114 TFEU whilst, at the same time, ensuring a high level of human health protection.

The Court also considered the legality and proportionality of several packaging restrictions imposed by the Directive. It upheld Article 13(1), which prohibits the display of any element or feature which might promote, or give a misleading impression with regard to, the product, including factual information about the product, its elements or characteristics, whether or not the information concerned is factually accurate. For example, the tobacco manufacturers had complained that this would prevent them referring to taste, smell, any flavourings or the fact that their product had improved biodegradability, organic or low tar or nicotine contents.  The Court held that a high level of health protection requires that consumers should not be encouraged to consume tobacco products by means of information which, although factually accurate, they may interpret as meaning that the risks associated with their habits are reduced or that the products have certain benefits.

The Court also assessed the proportionality of other packaging requirements, including the ban on flavoured tobacco and the requirement that new combined visual and pictorial health warnings should cover at least 65% of the front and back of the packet.  The Court rejected arguments that those requirements were manifestly inappropriate or went go beyond what was necessary to attain the objective of improving the internal market for tobacco and related products, taking as a base a high level of protection of human health, especially for young people. The Court also found that the other questions referred by the Administrative Court had disclosed no factors affecting the validity of certain other parts of the Directive.

In Pillbox 38, another preliminary reference from the Administrative Court, the Court considered whether the various requirements and restrictions imposed by Article 20 of the Directive on the construction, marketing and advertising of e-cigarettes were compatible with EU law. The Court again concluded that the question referred to it by the Administrative Court disclosed no factors affecting the validity of Article 20.

In Poland v Parliament and Council, the Polish government had brought an action to annul the provisions of the Directive which prohibited the use of flavouring in cigarettes, including menthol. The Court dismissed the application.

The judgment in Philip Morris is available here, the judgment in Pillbox 38 is available here, and the judgment in Poland v Parliament and Council is available here.

Ian Rogers QC and Eric Metcalfe appeared on behalf of the United Kingdom in all three cases. Anneli Howard appeared for Joh. Wilh. von Eicken GmbH, one of the tobacco manufacturers joined as an interested party in the Philip Morris case.

The cases have been widely reported in the national and international press, including the Times, the New York Times and the BBC.

High Court rejects challenge by tobacco multinationals to standardised packaging of tobacco

The action brought by British American Tobacco UK Ltd and others v Secretary of State for Health for the annulment of the Standardised Packaging of Tobacco Products Regulations 2015 was dismissed by Mr Justice Green in the High Court on 19 May.

One of the main purposes of standardised packaging is to render cigarette and hand rolling tobacco packaging and presentation less attractive to the eye and to the touch, especially to young people, and thus to reduce the number of young people starting to smoke and to make it easier for existing smokers to quit.  A key central argument by the tobacco companies in the case was that the Regulations, which will come into force on 20 May, are said to deprive the manufacturers of their trade marks on cigarette and hand rolling tobacco packaging.

The main complainants were the four tobacco multinationals. They claimed that the Regulations infringed a large number of provisions of EU and international law, including Article 1 of the First Protocol to the ECHR (on the right to property), the provisions on the free movement of goods within the EU, the Community Trade Mark Regulation and TRIPS. A range of arguments concerning the interpretation of the Revised Tobacco Products Directive and proportionality were also pursued by various manufacturers of tipping paper (the part of the paper which encloses the cigarette filter).

Mr Justice Green rejected each argument advanced by the claimants in a judgment of nearly 400 pages.  This judgment, which is one of the first in the world on standardised packaging measures, is likely to be highly influential in many jurisdictions. A number of countries have stated their intention to adopt standardised packaging measures similar to those in the UK.

Action on Smoking and Health (ASH), the tobacco control NGO, intervened in support of the Secretary of State for Health.

The judgment may be found here.

Ian Rogers QC, Julianne Kerr Morrison and Nikolaus Grubeck appeared on behalf of the Secretary of State for Health.

Peter Oliver and Ligia Osepciu appeared on behalf of ASH.

Professor Panos Koutrakos at World Procurement Congress 2016 on Brexit

Professor Panos Koutrakos has addressed an international audience of senior procurement executives from the most influential corporations across the globe at the World Procurement Congress 2016 (organized by Procurement Leaders). He participated at a panel on Brexit: Should Procurement Lose Sleep? On 18 May in London.

Professor Koutrakos explored the legal consequences of Brexit. He outlined the different legal arrangements which could govern the relationship between the UK and the EU and discussed their implications for business. He also examined the legal issues that would arise regarding the international treaties governing the relationships of the UK with the rest of the world and focused on their impact on business based in the UK or wishing to trade with the UK.