Court of Appeal Rules Restitutionary Award Not Appropriate in Devinish Case

14 Oct 2008

In an important case on financial remedies for victims of competition infringements, the Court of Appeal has held that a restitutionary award is not available either as a matter of English or European law. A restitutionary award is a remedy which is based on stripping a wrongdoer of the profit he has made from an unlawful act rather than compensating the victim for the loss that he has suffered. Such an award has been granted in limited circumstances by the English courts in circumstances where a compensatory award would be inadequate. Devenish purchased vitamins from a number of vitamin producers that were found by the European Commission to have engaged in a cartel. Devenish then incorporated those vitamins into feedstuff which it sold on. It argued that compensatory damages would be inadequate since it would be met by the defence that it had passed on the overcharge to its customers. The Court of Appeal (by a majority) held that it was precluded by a binding Court of Appeal judgment from granting a restitutionary award in this situation. The Court added that, even it was not so precluded, this was not an appropriate case for such an award. While the Court rejected an argument that EC law precluded a restitutionary award, it also found that EC law did not require a restitutionary award to be made available.

Christopher Vajda, instructed by Irwin Mitchell, acted for Devenish.