Court of Appeal upholds Visa strike out on limitation grounds

05 Aug 2015

Last October, Visa successfully obtained summary judgment from the Commercial Court in the interchange fees litigation, striking out over 30 years of potential damages sought by a group of 12 retailers, totalling over £500m. The retailers’ appeal against the ruling was heard before the Court of Appeal on 21/22 July.

The Court of Appeal judgment {[015] EWCA Civ 883 was handed down today, where the Chancellor confirmed the well-established Johnson “statement of claim test” regarding the application of s.32(1)(b) of the Limitation Act 1980 (whereby Claimants can extend the 6 year statutory limitation period). The test looks at whether there was sufficient material in the public domain, which the claimants were either aware of or could have reasonably discovered, in order for them to draft a prima facie case in a statement of claim.

The Court of Appeal confirmed that “relevant facts” in s.32(1)(b) are construed narrowly to include those necessary to complete the cause of action. It is not necessary for a claimant to know facts which might assist (i) in rebutting a potential defence (such as exemption under Article 101(3) TFEU), (ii) in strengthening the case evidentially, (iii) providing commercial considerations regarding the advantages or disadvantages in commencing proceedings or (iii) in quantifying loss. Such facts are not “relevant” for the purposes of s.32(1)(b)).

The Court of Appeal firmly rejected the appellants’ arguments that competition law damages claims are sui generis as a EU right such that they require a modification of the test. It also rejected the argument that the EU principles of effectiveness and full compensation and/or the forthcoming Damages Directive required a different interpretation to be applied to the Act.

On the facts, the Chancellor upheld Simon J’s ruling that the retailers had pleaded all the necessary ingredients for their cause of action in the particulars of claim, which had been signed by a statement of truth, and which could not be struck out. The retailers accepted that they had discovered no new facts since the start of the limitation period in 2007. Although the claimants argued that there were still some residual facts that remained unknown to them, the Court of Appeal held that those matters merely went to the strength of the case and did not go to critical parts of the cause of action, which had already been pleaded in sufficient detail.

The Court of Appeal did allow the appeal against the award of indemnity costs, holding that the weakness of the appellants’ case was not a justification on its own for an indemnity award.

The Appellants have sought permission to the Supreme Court.

Anneli Howard (instructed by Linklaters LLP) acted for the Applicants, Visa Europe a.o., the Third to Fifth Defendants in the claims, who took the lead in the application.

Please click here to read the Court of Appeal Judgment.