Mobility scooters ‘opt out’ class action abandoned

12 May 2017 | by Monckton Chambers

The first ever application for a Collective Proceedings Order (CPO) for an ‘opt out’ competition law class action is to be withdrawn. An order published on the Competition Appeal Tribunal’s website today confirms that the applicant for the CPO “has decided not to pursue her application“.

By the CPO application (which was the first to be made under the new class actions regime introduced by the Consumer Rights Act 2015), the applicant, Dorothy Gibson, had sought an order allowing her to pursue claims for damages on behalf of consumers who had purchased mobility scooters. In May 2014 the Office of Fair Trading (OFT) had issued a decision finding that a wholesaler distributor of mobility scooters called Pride Mobility Products Limited and eight of its retailer customers had infringed the Competition Act’s ‘Chapter I prohibition’. Each of those eight retailers had agreed to a request from Pride that the retailer refrain from advertising on the internet below-RRP prices for certain models of scooter. Ms Gibson sought damages for losses alleged to have been suffered not only by consumers who bought a scooter from one of those eight retailers, but also by other consumers (i.e. consumers who bought from other retailers) whom Ms Gibson claimed had paid higher prices as a result of ‘umbrella effects’.

Ms Gibson’s decision not to further pursue her application for a CPO follows a judgment of the Tribunal on 31 March 2017 in which the Tribunal concluded that the expert economic evidence relied on by Ms Gibson had been prepared on an erroneous basis. That was because the expert had been instructed to analyse the possible effects on prices of Pride’s “policy” of discouraging its retailer customers from advertising on the internet below-RRP prices for the relevant scooter models. Since the CPO application had been brought in respect of what were said to be “follow-on” claims (i.e. claims brought in relation to the infringements already found by the OFT), the economist should have been instructed to estimate only such alleged consumer losses as may have been caused by Pride’s agreements with the eight retailers (i.e. the retailers who were, together with Pride, the addressees of the OFT’s infringement decision).

By its 31 March judgment the Tribunal did not, however, completely close the door on Ms Gibson’s CPO application. Although it was not prepared to grant a CPO on the basis of the material that had been presented by Ms Gibson at the CPO application hearing, the Tribunal decided to adjourn (rather than dismiss) the application, thus leaving open the possibility for her to return to the Tribunal to seek a CPO on the basis of a fresh expert report prepared on the correct basis.

A news item on the 31 March judgment, and a copy of that judgment, is available here.

As Ms Gibson has now decided not to further pursue her application, the Tribunal has directed that the parties seek to reach agreement on costs.

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