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Competition Litigation in England and Wales

Availability of civil claims

Scope for civil claims in England and Wales


England and Wales continues to see increasing competition litigation activity, both in relation to follow-on and stand-alone claims for damages and for injunctive relief. This trend is set to continue, particularly given the major reforms introduced by the Consumer Rights Act 2015 (the “2015 Act”) in October 2015. These reforms expanded the jurisdiction of the UK’s specialist competition court, the Competition Appeal Tribunal (the “CAT”), introduced a fast track procedure for competition claims and, most controversially, created an opt-out collective action mechanism in the CAT.

Basis for competition claims

Competition law claims in England and Wales include claims resulting from a breach of:

i) Article 101 or 102 of the Treaty on the Functioning of the European Union (“TFEU”); 1

ii) Articles 53 and 54 of the Agreement on the European Economic Area; and

iii) the domestic equivalent of Articles 101 and 102 in the Competition Act 1998 (the “1998 Act”), which are referred to as the “Chapter I” and “Chapter II” prohibitions respectively.

The principal cause of action in competition claims is breach of statutory duty, although claimants may also plead economic torts, such as conspiracy to use unlawful means.2

Defendants may rely on a breach of competition law as a defense to a claim in certain circumstances. For example, in a claim for breach of contract, the defendant may argue that the contract is unenforceable as it infringes competition law and, therefore, the claim cannot succeed.

Competition law claims can be brought on a stand-alone or follow-on basis. Stand-alone claims are where the claimant alleges an infringement of competition law independently of any competition authority investigation or decision. Follow-on claims rely on a prior infringement decision to establish liability, such as a finding of the European Commission or the UK’s national competition authority, the Competition and Markets Authority (the “CMA”).

Claims in the High Court and the CAT

Civil claims may be brought in the High Court or the CAT. These two forums are at the same level within the English courts system, but they have different powers and their own procedural rules. To date, the High Court has been the most popular forum for competition claims due to problems with the CAT’s jurisdiction. However, reforms made in 2015 have sought to eliminate these issues, align many of the rules which apply in the High Court and the CAT, and establish the CAT as the primary forum for competition claims in the UK.

Claims filed in the High Court will usually be assigned to the Chancery Division, although some cases may be suitable to be heard in the Commercial Court.3

Cases in the High Court are determined by a single judge. By contrast, cases in the CAT are typically determined by a panel of three. 4 A CAT panel is made up of: (i) the CAT’s President or a Chairman; and (ii) two “ordinary members.” Chairmen of the CAT must be legally qualified and have appropriate experience and knowledge; they include judges who also sit in the High Court of England and Wales. 5 The CAT’s ordinary members need not be legally qualified, but they must have appropriate experience and expertise in areas such as business, economics or accountancy.

Claims filed in the CAT are governed by Sections 47A-49B of the 1998 Act, which provides the statutory mechanism for bringing civil claims for breaches of competition law in the CAT. Until recently, this provision permitted only follow-on claims for damages to be filed in the CAT. In October 2015, however, the 2015 Act amended the 1998 Act to allow the CAT to hear stand-alone claims, including claims for injunctions. More broadly, the 2015 Act aligned many of the rules which apply in the CAT with those applicable in the High Court. While the CAT retains its own procedural rules, the Competition Appeal Tribunal Rules 2015 (S.I. No. 1648/2015) (the “CAT Rules”), many of those rules mirror the Civil Procedure Rules (“CPR”), which govern claims in the High Court.

The 2015 Act also introduced an opt-out collective redress mechanism for competition claims for the first time. Although parallels have been drawn between the new collective action mechanism and US-style class actions, there are numerous restrictions on such actions in the UK and considerable discretion is left with the CAT to decide whether to permit such claims. Collective proceedings and settlements may only be brought in the CAT. 6  Competition claims may be transferred to or from the CAT and the High Court. 7

The English courts remain generous in their approach to accepting jurisdiction over competition cases under the Brussels Regulation. 8 In several cases, claimants have filed claims in the High Court against UK-domiciled subsidiaries of cartelists in circumstances where none of the addressees of the infringement decision were domiciled in the UK. 9 The use of “anchor defendants” in this way was rejected by the CAT, which held that there must be a UK-based addressee of the infringement decision to give the CAT jurisdiction under the old Section 47A of the 1998 Act. 10 However, the divergence between the High Court and the CAT on the question of jurisdiction may fall away under the new regime introduced by the 2015 Act. 11

Applicable limitation periods

The limitation period for bringing a claim for damages resulting from an infringement of competition law is six years from the date upon which the cause of action accrued. 12 A cause of action in tort typically accrues when the damage is suffered.

Where a fact relevant to the claimant’s right of action has been deliberately concealed (or commissioned in circumstances where the breach was unlikely to be discovered for some time), as with a price-fixing cartel, the limitation period does not begin to run until the claimant discovers the concealment or could, with reasonable diligence, have discovered it. 13 For this exception to the ordinary limitation rules to apply, the facts which have been concealed must be those which are essential for the claimant to establish a prima facie case. 14 The Court of Appeal has recently held that this applies to competition claims and that there is no special rule to delay the running of the limitation period in such claims. 15 Therefore, the claimant need not have all details and facts relating to the infringement in order to commence proceedings and time may start to run before the announcement of an infringement decision.

Before the 2015 Act came into force, special limitation provisions applied to follow-on claims in the CAT. While the limitation rules have now been aligned in the High Court and the CAT, 208 the transitional provision in the CAT Rules means that the old CAT rules 16 continue to apply to claims arising before October 1, 2015. 17 In essence, the old CAT limitation period required claims to be brought within two years of: (i) the date the cause of action accrued; or (ii) the relevant infringement decision becoming final (i.e., after the expiry of the appeal period, or the conclusion of any appeal process).

Specific limitation provisions apply to collective proceedings in the in the CAT. Section 47E(4) of the 1998 Act provides that the limitation period for a Section 47A claim is suspended from the date collective proceedings are commenced. Section 47E(5) sets out when the suspended limitation period will resume, such as if the collective claim is withdrawn.

The EU Antitrust Damages Directive (the “Damages Directive”) 18 makes specific provision regarding limitation periods for competition claims. Member States are required to bring their law into line with those provisions by December 27, 2016. Article 10 of the Damages Directive provides that the limitation period must be at least five years and shall not begin to run before the infringement has ceased and the claimant knows, or can reasonably be expected to know:

i) of the behavior and the fact that it constitutes an infringement of competition law;

ii) of the fact that the infringement of competition law caused harm to him; and

iii) the identity of the infringer.

While the Damages Directive is unlikely to bring about a significant change in the English law of limitation so far as it relates to cartel claims, the requirement that the limitation period does not start to run until the infringement has ceased could considerably extend the period for other types of competition infringements, particularly abuse of dominance.

Article 10 of the Damages Directive also requires that the limitation period be suspended where a competition authority takes action to investigate the conduct until at the earliest one year after the infringement decision has become final or after the investigation is otherwise terminated. English law will need to be amended to reflect this provision.


Appeals from the High Court and the CAT are made to the Court of Appeal. In both cases, permission to appeal is required from the Court of Appeal or the relevant court of lower instance. Permission to appeal may be given only where the court considers that the appeal would have a real prospect of success or there is some other compelling reason why the appeal should be heard.19

In the CAT, Section 49 of the 1998 Act provides for appeals in proceedings under Section 47A or in collective proceedings:

i) on a point of law arising from a decision as to:

a) the award of damages or other sum (other than a decision on costs or expenses);

b) the grant of an injunction;

c) an infringement finding in a stand-alone claim; and

ii) from a decision as to the amount of an award of damages or other sum (other than the amount of costs or expenses).20

Appeals from the CAT lie to the Court of Appeal, provided that the permission of the CAT or the Court of Appeal has been obtained. Appeals can be made by a party to the proceedings or a person who has sufficient interest in the matter. Notably, there is no statutory provision for appeals against a decision on an application to certify collective proceedings (see below).21

A further appeal from the Court of Appeal on points of law of general public importance lies to the Supreme Court (formerly the House of Lords), provided that permission to appeal is granted by either the Court of Appeal or the Supreme Court.

Availability of class actions for infringement of competition law and/or damages available in England and Wales

A form of class action is available in the CAT only. The 2015 Act amended the 1998 Act to give the CAT the power to determine certain competition claims by way of opt-out and opt-in collective proceedings. This is the closest the English courts have to a class action mechanism. The relevant statutory provisions are set out in Section 47B-E of the 1998 Act, and the procedural rules are provided by the CAT Rules. The provisions came into force on October 1, 2015 and have not been used at the time of writing. In addition to the CAT’s collective actions regime, there are a number of group or multi-party litigation mechanisms available in the High Court.

Collective proceedings in the CAT

Collective proceedings are proceedings brought on behalf of a defined class of persons by a representative. Such proceedings can be “opt-in” (where each class member actively signs up to participate in the proceedings) or “opt-out” (where, in broad terms, each person within the class is automatically included in the proceedings unless they actively choose not to be). The opt-out provisions apply to UK-domiciled claimants only, but non-UK-domiciled claimants may opt in to the collective proceedings.

The bringing of collective proceedings must be approved by the CAT. This approval involves two aspects:

i) Authorization of the class representative: the class representative need not be a member of the class and is not required to have a personal claim against the proposed defendant. However, the Tribunal must consider that it is “just and reasonable” for that person to act as the class representative in the proceedings. 22

ii) Certification of the claims as eligible for inclusion in collective proceedings: to be eligible, the claims must: be brought on behalf of an identifiable class of persons; raise “common issues”; and be “suitable” to be brought in collective proceedings. 23

The CAT will also determine whether the action should proceed on an opt-in or opt-out basis.24

Where the CAT gives a judgment or makes an order in collective proceedings, the judgment or order is binding on all represented persons, unless otherwise specified. 25 The CAT may not award exemplary damages in collective proceedings, although it can make an aggregate damages award where it is not required to assess the amount recoverable by each represented person.26

The CAT may award costs to or against the class representative but not to or against a represented person (unless that person is the class representative), except in certain limited circumstances.27 Damages-based agreements for the payment of legal fees are not enforceable in opt-out collective proceedings (see section 10 below).28

At the time of writing, no collective proceedings had yet been brought in the CAT.

High Court proceedings

There are no opt-out mechanisms for group claims in the High Court.

Representative proceedings, where more than one person has the “same interest” in a claim, may be brought in the High Court. 29 Interested persons must opt in to the action in order to participate. This type of proceeding is relatively uncommon because the “same interest” test that each claimant must meet in order to join the proceedings is difficult to satisfy. An attempt to broaden the approach so as to create, in essence, an opt-out representative action failed in Emerald Supplies Ltd v British Airways plc 30 . This was because the criteria for identifying who might qualify for inclusion in the class depended on the outcome of the action itself and, further, because not all members of the class had the same interest in the outcome of the claim (as some were direct customers and some indirect, who would have had different interests in, for example, questions of passing-on).

Group litigation orders (“GLOs”) are also available and can be made where one or more claims raise “common or related issues” of fact or law. 31 This test is wider than the requirement that the persons have the “same interest,” as is required for representative proceedings (see above). GLOs are rarely used in practice.

Conduct of proceedings and costs

Burden of proof

The claimant bears the burden of proof to establish that there has been an infringement and that he has suffered loss as a result of that infringement. The standard of proof is the “balance of probabilities.” 32

In “follow-on” cases, the decision of the competition authority or the CAT establishes the infringement, leaving the claimant to prove only that the infringement caused it loss. Infringement decisions of the European Commission, the CMA and the CAT are binding in follow-on proceedings in the High Court and the CAT. 33 Decisions of other national competition authorities are not binding, but will be treated as admissible evidence. 34

In “stand-alone” cases, the claimant is required to establish that there has been an infringement as well as causation and loss. However, the burden of proof in establishing that an agreement merits exemption under Article 101(3) TFEU or Section 3 of the 1998 Act lies with the defendant, which must also prove its case on the balance of probabilities.

To establish a causal link between the infringement and any loss suffered, the claimant must demonstrate that “but for” the defendant’s actions he would not have suffered the loss identified and that he is therefore entitled to be restored to the financial position that he would have been in if the infringement had not occurred. Although not yet the subject of any judicial authority in the English courts, the judgment of the Court of Justice in Manfredi 35 that “any individual” could make such a claim where a “causal relationship” exists between the harm suffered and the prohibited agreement is assumed to mean that indirect purchasers are able to bring claims.

The Damages Directive is likely to require changes to the English law in relation to burden of proof, namely:

i) to make clear that the burden of proving that overcharge was passed on lies with the defendant seeking to rely on pass-on as a defense (Article 13) and, where the existence of the claim depends on overcharge having been passed on, the claimant bears the burden of proving the existence and scope of such passing-on, subject to certain presumptions which apply to indirect purchasers (Article 14); and

ii) to introduce a rebuttable presumption that cartel infringements cause harm (Article 17).

Joint and several liability of cartel participants

Liability for infringements of competition law involving multiple parties will ordinarily be joint and several. This means that a claimant may bring an action for damages resulting from a breach of competition law, such as a cartel, against any cartelist for the entirety of the loss suffered by the claimant as a result of the anti-competitive conduct, even if there was no direct or indirect relationship between the claimant and that defendant.

The Damages Directive introduces two derogations to the principle of joint and several liability:

i) small or medium sized enterprises (“SMEs”) are only liable to their direct and indirect purchasers where (a) their market share in the relevant market was below 5% at any time during the infringement and (b) the application of the normal rules of joint and several liability would irretrievably jeopardize its economic viability and cause its assets to lose all their value (save where the SME was the leader or coercer, or has previously been found to have infringed competition law) (Articles 11(2)–(3)); and

ii) infringers will not be permitted to obtain contributions from infringers that have obtained immunity from fines in return for voluntary cooperation with a competition authority; infringers with such immunity will typically be required to compensate their own (direct and indirect) customers only (Articles 11(4)–(5)).

The Civil Liability (Contribution) Act 1978 (the “1978 Act”) provides that any person liable for damage suffered by another may recover a contribution from any third party who is also liable in respect of the same damage. To claim such contribution, defendants can join other potentially liable parties to the action against them and/or pursue third parties in separate proceedings (including after judgment has been given). 36 Actions to recover contribution in reliance on the 1978 Act must be brought within two years of the date upon which the right to claim contribution accrued.

It is for the court to assess how liability should be apportioned between persons responsible for the same damage. The court will make such an award as is considered “just and equitable having regard to the extent of that person’s responsibility for the damage in question,” in accordance with Section 2(1) of the 1978 Act. However, it is far from clear how the English courts will approach this exercise in practice. For example, liability could be apportioned equally as between the defendants or based on: (i) each defendant’s culpability for the cartel; (ii) the amount of sales each defendant made to the claimant; or (iii) the defendants’ market shares.

The joint and several nature of the liability complicates settlement discussions in cartel claims because it remains open to other defendants to sue the settling defendant on the theory that the settling defendant has not settled a sufficiently large portion of the joint liability. 37 There are mechanisms designed to reduce the risk of such contribution claims being successful in effectively re-opening the settlement reached but they have not yet been tested before the English courts.

Documents and evidence that can be used by claimants (for example, investigation evidence) and legal privilege

Evidence in competition claims typically includes statements of witnesses of fact and expert witnesses, as well as disclosure. Witnesses of fact and expert witnesses may be required to give oral evidence and may be cross-examined. Compared to the courts of many civil law countries, the disclosure regime in England and Wales is extensive.

Disclosure in the High Court

Disclosure in the High Court is governed by CPR 31. “Standard disclosure” is where parties disclose all documents within their control and upon which they rely, that adversely affect their own or the other party’s case or that support the other party’s case. Disclosure is given by exchanging lists of documents. The parties are then entitled to inspect and take copies of the documents disclosed by list, save where those documents are privileged. 38 Instead of standard disclosure, the parties may be ordered to disclose only those documents on which they rely and specific categories of document. For example, a defendant could be ordered to disclose the pre-existing documents it provided to the European Commission as part of an investigation, documents relating to pricing of the cartelized product or communications between certain relevant persons. A more focused issues-based approach is increasingly preferred by the courts over wide-ranging and costly standard disclosure.

As well as disclosure between the parties, it is also possible to seek pre-action disclosure 39 (see below) and disclosure from non-parties to the proceedings. 40 Where a party seeks disclosure from the European Commission or a national competition authority, Articles 6-7 of the Damages Directive will be relevant.41

Given the confidential nature of many documents which will be required to be disclosed, a “confidentiality ring” will typically be put in place. Confidentiality rings usually allow only legal advisers full access to confidential documents and restrict how those documents can be used and shared. In any event, disclosed documents can only be used for the purpose of the proceedings (subject to certain exceptions, such as where the document has been referred to in open court).42

Third parties to an action can obtain, without the need for permission or prior notification to the parties, any statement of case, including the particulars of claim, defense, reply and any further information filed with the civil courts. A party to an action, or any person identified in a statement of case, may apply for an order preventing or restricting disclosure of that statement of case.

Disclosure in the CAT

Disclosure in the CAT is governed by rules 60–65 of the CAT Rules, which came into force on October 1, 2015. The CAT Rules have adopted a similar approach to disclosure as that which applies in the High Court, although the CAT has an especially broad discretion.

Pre-action and non-party disclosure are also available in the CAT. 43 Confidentiality rings are routinely used in the CAT. Third party access to court documents is more restricted in the CAT than in the High Court.

English Courts’ approach to disclosure

The English courts have proved quite aggressive in ordering the disclosure of information in relation to competition law damages claims. Indeed, disclosure of the confidential version of the European Commission’s decision, or parts of that decision, have been ordered in a number of cases., 44 Members of the judiciary have also expressed frustration at the time taken by the European Commission to publish non-confidential versions of decisions, describing delay as “astonishing and unsatisfactory”. 45

The approach of the English courts to disclosure of leniency material and other documents will be guided by the provisions of Damages Directive, which prohibits the disclosure of corporate leniency statements and settlement submissions. 46 Until that Directive is implemented, disclosure of leniency material continues to be governed by the Court of Justice’s judgments in Pfleiderer 47 and Donau Chemie, 48  which requires the court to balance the need for disclosure and the need to protect the leniency regime. In conducting this balancing exercise, the English court ordered that certain leniency materials be disclosed in National Grid. 49 Despite the more restrictive approach which will be introduced by the Damages Directive, we expect the English courts to continue to take a robust view on the scope of material that should be made available to claimants and on the time at which that material should be disclosed.

Requesting information from a competition authority

As in all Member States, the national court may ask the European Commission to provide information or give its opinion on questions regarding the application of the EU competition rules. 50 The English High Court has made such requests in several cases. 51 Further, both the European Commission and the national competition authority can submit observations to the English courts as amicus curiae. 52

The CMA has a right to be notified of competition claims in the High Court and the CAT. 53 It also has the right to submit written observations on issues relating to the application of Article 101 or 102 TFEU or Chapter I or II of the 1998 Act, and to apply for permission to submit oral observations. 54

Parties may also seek access to documents on the European Commission’s case file directly in accordance with the Transparency Regulation. 55 However, the ability to do so is significantly restricted. This is because competition investigations are generally presumed to be subject to a wide exception which entitles the European Commission to refuse to provide documents if doing so would undermine the protection of commercial interests of a natural or legal person, court proceedings and legal advice, or the purpose of inspections, investigations and audits, unless there is an overriding public interest in disclosure.56

Pre-action disclosure

Pre-action disclosure may be ordered against a prospective defendant where necessary to fairly dispose of the anticipated proceedings, assist the disputes to be resolved without proceedings or save costs – although the courts will not tolerate a fishing expedition on the part of the claimant. 57 An application for pre-action disclosure in relation to competition law claims has been rejected in circumstances where the Court considered the claim to be too speculative and the scale of disclosure was too large and unfocused.58

This is not to say that pre-action disclosure will never be granted. However, such an application will need to be carefully considered. Pre-action disclosure may, in some circumstances, be ordered against persons who are not prospective defendants, as illustrated by the judgment of the Court of Appeal in Total E&P Soudan SA v Edmonds 59 in which a targeted request for specific documents that could be readily disclosed at little cost or inconvenience was allowed.

Average length of time from issue of claim to judgment in England and Wales

At the outset, it should be noted that a significant proportion of competition claims settle and that only a small number have reached trial. That said, a claim in the civil courts typically takes around two years to reach trial, depending on the complexity of the case, the volume of evidence and the interlocutory applications brought by the defendant(s) (such as challenges to jurisdiction or stay applications pending the outcome of appeal of an infringement decision). Our experience is that private actions have, so far, taken longer to resolve than is typical for other civil claims due to the relative novelty and difficulty of the issues raised in private actions brought to date (in terms of jurisdiction, economic analysis, etc.). Cartel claims tend to take longer than abuse of dominance claims.

Cases can be expedited in the civil courts and it may be possible to apply for a speedy trial. A party may also seek to bring the case to an early conclusion through: (i) an application to strike out the claim; or (ii) an application for summary judgment where the claimant or defendant has no real prospect of success, although such applications are rarely successful.

Claims before the CAT may be slightly quicker than before the civil courts, although the small number of cases which have reached final judgment make it difficult to make a generalized statement. A fast track procedure has recently been introduced in the CAT whereby the main hearing will take place within six months and a cost cap will apply. 60 This procedure is designed for SMEs seeking injunctive relief where the time estimate for the main hearing is three days or less. 61 While there have not yet been any collective actions in the CAT, we estimate that they will take considerably longer than individual claims to reach trial.

Appeals to the Court of Appeal will generally add a further year; with a similar period for a further appeal to the Supreme Court.

Average cost from issue of claim to judgment in England and Wales

The potential costs of litigating a claim for breach of competition law are difficult to quantify as they will depend on a range of factors (type of claim, number of parties, volume of documents, procedural issues, etc.). Both claimants and defendants must consider that this type of claim has the potential to become very complex and drawn out over a long period of time, causing costs to spiral. It is not unusual for claimant and defendant costs to exceed GBP1 million per party and sometimes to be several multiples of that amount in cartel claims following on from European Commission decisions. Disclosure, forensic accounting and economic analysis can considerably increase legal fees.

The courts have a general discretion as to the award of costs between parties, taking account of any offers to settle that are made 62 and the parties’ general conduct in the matter. In most cases, the losing party will be ordered to pay the successful party’s costs and the parties’ will then attempt to agree the actual amount to be paid. Where the parties cannot reach an agreement, the court will assess what costs can be recovered. In practice, the successful party generally only recovers between 70% and 80% of its actual costs.

The courts have the power to manage costs, which may include requiring costs budgets to be exchanged between the parties and a cap on recoverable costs. Where a claim is subject to the fast track procedure in the CAT (see section 9 above), the amount of recoverable costs must be capped at a level determined by the CAT.63

Damages-based agreements (“DBAs”) are permissible in competition claims, save for opt-out collective proceedings in the CAT.64 DBAs are a form of contingency fee arrangement whereby lawyers’ fees are contingent on the claimant winning the case and are determined as a percentage of the damages awarded. There are various restrictions which apply to DBAs, including a cap on the contingency fee of 50% of the damages recovered. 65

Conditional fee arrangements (“CFAs”) provide that lawyers’ fees are only paid in certain circumstances, typically where the client wins the case. Such agreements are permissible in competition claims, although success fees are not recoverable from the opponent for CFAs entered on or after April 1, 2013. 66 Similarly, any after-the-event insurance premium owed by a winning party is no longer recoverable from the losing party. 67

Third party funding/alternative funding.

Historically, the availability of third party funding has been extremely limited in England and Wales. More recently, however, the litigation funding industry has grown considerably and there are now a number of third party and alternative funding options available in competition cases in England and Wales.

While the English rules against champerty and maintenance continue to prevent the improper support of litigation, the common law rules have been significantly scaled back by statute. 68 Therefore, a third party funding arrangement is likely to be enforceable provided the funder has no right to control the proceedings or otherwise gains an interest in the action itself (rather than the proceeds).

The Association of Litigation Funders (“ALF”) published a Code of Conduct in November 2011, which was updated in January 2014. This Code of Conduct includes, for example a guiding principle that funders may not seek to get the litigant’s advisers to cede control of the conduct of the dispute to the funder. More recently, the ALF has controversially introduced a new requirement for its members to hold at least GBP2 million in capital to fund cases.

Alternative methods of dispute resolution

Alternative means of dispute resolution are available in England and Wales. Mediation is commonly employed to resolve disputes and court rules require parties to consider the use of mediation or other alternative dispute resolution. In addition, the High Court has held that competition law can be arbitrated if the claims alleging competition law infringement fall within the ambit of a contractual arbitration clause.69

Most claims for damages resulting from an alleged breach of competition law are resolved by settlement before they reach trial. The details of such settlements are not generally publicly reported, but some have been achieved as a result of an alternative means of dispute resolution. Where the parties reach a settlement after proceedings have been issued, they are required to notify the court. In most instances, the parties will agree to have the settlement agreement embodied in a consent order or judgment.

Collective settlements in the CAT

The 2015 Act introduced a new collective settlement mechanism which applies in the CAT only. 70 This enables opt-out collective proceedings to be settled, or for collective claims to be settled before litigation is commenced, pursuant to a specific procedure. In both instances, the CAT must authorize the settlement reached between the approved class representative, on behalf of the class, and the defendant(s) with the effect that the terms of the settlement bind the entire class. The CAT will only approve a proposed collective settlement if it is satisfied that its terms are “just and reasonable.” The CAT Rules set out the factors the CAT may consider when determining whether a proposed settlement is just and reasonable, such as the amount of the settlement and the estimated number of persons likely to be entitled to a share. 71 As the collective settlement procedure is new, however, it remains to be seen how the CAT will approach applications for collective settlement approval orders.

Voluntary redress schemes

The 2015 Act also introduced a new power for the CMA and other concurrent regulators to approve voluntary redress schemes from applicants who have infringed Article 101 or 102 TFEU or the Chapter I or II prohibitions.72 Such schemes provide a way of offering compensation for competition infringements outside of the courts. In certain circumstances, an approved voluntary redress scheme may lead to the reduction of any penalty imposed by the CMA (or concurrent regulator) in respect of the infringement. However, the process for obtaining approval is complex and has not yet been tested.


Availability of damages and quantification

The basic rule is that damages are available and awarded in order to restore the claimant to the position it would have been in had the breach causing it loss not occurred. Thus, claimants may seek compensatory damages including interest in respect of any infringement of competition law that has caused the claimant loss. English law therefore accords with the Damages Directive, which requires Member States to ensure there is a right to full compensation for any harm caused by a competition law infringement, including actual loss, loss of profit, and interest (Article 3).

Damages are calculated on the basis of a counterfactual or “but for” test. In Arkin v Borchard Lines 73, the judge stated that an assessment of damages would involve starting with the relevant market as it existed at the time of the alleged infringement and then asking what loss, if any, the infringement had as a matter of common sense directly caused. For this purpose, it would be necessary to reconstruct the market conditions most likely to exist if no infringement had occurred (the counterfactual). By way of example, in the case of price-fixing, a customer might be awarded the difference between the price it actually paid for the goods and the price it would have paid in a competitive market. This but for or counterfactual approach has been followed subsequently (see Devenish Nutrition Ltd v Sanofi-Aventis SA (France) & Ors 74, Crehan 75, Healthcare at Home v Genzyme 76, 2 Travel Group plc (in liquidation) v Cardiff City Transport Services Limited 77 and Albion Water Limited v Dŵr Cymru Cyfyngedig. 78)

It remains unclear how the counterfactual approach should be applied in different circumstances however. For example, the Court of Appeal found in Crehan (a price-fixing case) that, instead of attempting to calculate the profits that the claimant might have made had he not been subject to an anti-competitive agreement, an appropriate measure of damages might instead be the value of the going concern that the claimant would have had but for the agreement as well as his actual losses. (This award was overturned by the House of Lords (now the Supreme Court) on a separate issue of EU law.) More recently, in Albion water the CAT considered the appropriate methodology for calculating the counterfactual price in an abuse of dominance case. It held that there would typically be a range of lawful access prices a defendant could have offered and that the counterfactual access price should be the figure in the middle of that range (i.e., the CAT calculated damages on the basis of a reasonable access price, rather than the highest possible access price the defendant could lawfully have charged).

At the time of writing, there is no binding authority directly establishing that the concept of “passing-on” should be considered relevant to quantifying damages in England and Wales (i.e., where the claimant is said to have passed on any loss of profit caused by cartel prices by inflating his own prices to the ultimate consumer). However, various English cases suggest this concept should be applied. In any event, the UK will be required to formally implement laws recognizing passing-on by December 27, 2016 under the Damages Directive. To aid indirect purchasers, the Damages Directive also requires recognition of a rebuttable presumption that indirect purchasers have suffered some level of overcharge harm as a result of an infringement.

At the EU level, the European Commission adopted a communication on quantifying harm in antitrust damages actions and an accompanying Practical Guide in June 2013. The Damages Directive also states that the European Commission will issue guidelines for national courts on how to estimate the share of the overcharge which was passed on to the indirect purchaser (Article 16).

The ordinary English law limitations to damages may also apply to competition law claims. This is demonstrated by a recent case in which the Court held that a claim may be barred by a dishonest act on the claimant’s part, applying the principle of ex turpi causa. 79

Punitive and exemplary damages

An award of exemplary damages is currently a theoretical possibility in a competition damages claim in England and Wales, with one such award having been made in an abuse of dominance case (2 Travel 80). Such awards are highly exceptional and 2 Travel was a case with unusual facts, notably because the national competition authority issued an infringement decision but did not impose any fines. Further, the amount awarded was modest (just GBP60,000) and is consistent with the typically modest size of exemplary damages awards in other English law contexts.

In any event, punitive and exemplary damages will be prohibited once the UK implements the Damages Directive because this Directive limits damages to compensatory awards only (Article 3(3)).

Availability of interim or final injunctions in respect of an alleged competition law infringement

An injunction is an order of the court that requires a party to do a specific act or refrain from doing a specific act. It may be interim (granted pending full trial of the issues) or final (granted after the conclusion of proceedings). In competition claims, injunctions are used to prevent the continuation of an (alleged) infringement, typically an abuse of dominance such as a refusal to supply.

Interim and final injunctions may be sought from the High Court or, as a result of recent changes, from the CAT. If necessary, these bodies may grant an interim injunction on fewer than 24 hours’ notice and in some cases without notifying the opposing party.

Before granting an interim injunction, the court will generally require the applicant to give a cross-undertaking in damages to cover any loss suffered by the defendant as a result of the injunction in the event of the applicant losing the case.

The grant of an injunction is at the discretion of the court. In determining whether to exercise this discretion, the court will consider the following: 81

i) Whether there is a serious question to be tried. The claimant does not need to show a prima facie case and there is no in-depth analysis of the merits, although the claim must not be frivolous or vexatious.

ii) Whether damages would be an adequate remedy. If damages are an adequate remedy the application for an injunction will be refused.

iii) The balance of convenience of each of the parties should the order be granted. The court will consider the respective inconvenience or loss to each party if the order is granted or refused.

Recent cases highlight the importance of complying with these basic requirements (see Dahabshiil Transfer Services Limited v Barclays Bank plc 82, Chemistree Homecare Limited v Abbvie Limited 83 and Packet Media Ltd v Telefonica UK Limited 84). 85 In Chemistree, the claimant alleged that the defendant’s decision to withdraw the supply of a particular drug to the claimant was an abuse of the defendant’s dominant position, seeking an interim injunction to continue the supply. This was refused in the High Court on the basis that the claimant had not given sufficient evidence that the defendant had a dominant position in the market concerned or, even if it had, that the defendant had abused any such position or that the claimant would suffer loss as a result. This was upheld on appeal. In contrast, in Dahabshiil, the High Court granted an injunction on the basis that the claimant had demonstrated there was a serious question as to whether the defendant had a dominant position and had abused that dominance in particular markets.

The CAT will grant injunctions using the same criteria, subject to rules 67-70 of the CAT Rules. Injunctions issued by the CAT are enforceable as if they had been issued by the High Court.

Emerging trends

2015 saw the most significant reform to competition claims in England in a decade. The introduction of collective proceedings and settlements, as well as the expansion of the CAT’s jurisdiction, places the UK at the forefront of competition litigation in Europe. These reforms, combined with existing features of the English legal system – such as the broad scope for disclosure, experienced and efficient commercial courts and, to date, relatively generous approach on jurisdiction – mean the English courts are likely to remain a forum of choice for claimants seeking redress for competition law wrongs. Indeed, we have already seen a number of law firms and litigation funders establishing practices in England and Wales so as to bring claims in this area.

The implementation of the Damages Directive in late 2016 will bring considerable change to the competition damages landscape across the EU. 86 While the Damages Directive requires some changes to the English private actions regime, the amendments are likely to be less significant than in other Member States because of the relatively established right to competition damages, the availability of broad disclosure, joint and several liability, and suchlike. That said, legislative changes will be necessary to bring English law into line with the Damages Directive’s provisions in areas such as the disclosure of leniency and settlement documents, the suspension of limitation periods and the liability of leniency recipients.


1 Rights and obligations provided by the TFEU are directly enforceable in the English courts (Section 2(1), European Communities Act 1972). Further, Articles 101 and 102 TFEU have been held to be directly effective in all Member States (Garden Cottage Foods v Milk Marketing Board [1984] AC 130 and Courage v Crehan [2001] ECR I-6297).

2 Claimants increasingly use the economic torts to seek damages for conduct which is in breach of foreign competition laws, but not EU or English competition law (as in the claims arising from the air freight cartel). To make out the economic tort of unlawful means conspiracy, the defendant must have intended to injure the claimant. While it is accepted that cartel conduct can constitute a conspiracy to use unlawful means, the Court of Appeal has held that an infringement decision of the European Commission in Air Freight was not sufficient to establish the requisite intention and nor could it be inferred from the cartelists intention to benefit their own businesses (Air Canada & Ors v Emerald Supplies Limited & Ors [2015] EWCA Civ 1024). Therefore, it is questionable how popular the economic torts will be in future claims, particularly follow-on claims.

3 Paragraph 2.1(b) of the CPR Competition Law Practice Direction.

4 A single judge may hear a claim where the case is allocated to the “fast track procedure.” Section 14(1A) of the Enterprise Act 2002. The fast track procedure is governed by rule 58 of the Competition Appeal Tribunal Rules 2015 (S.I. No. 1648/2015).

5 Suitably qualified judges sitting in the Court of Session in Scotland or the High Court of Northern Ireland may also be deployed as Chairman of the CAT (Section 12(2) of the Enterprise Act 2002).

6 Note, however, that there are additional mechanisms for group claims in the High Court. These include joint proceedings, same interest representative actions and Group Litigation Orders (“GLO”).

7 Section 16, Enterprise Act 2002. Claims transferred from the CAT to the High Court include Teva UK Limited & Others v Reckitt Benckiser Group plc & Others; the first case to transfer from the High Court to the CAT was Sainsbury’s Supermarkets Ltd v MasterCard Incorporated & Others, which was transferred in December 2015 and was due to be heard at the time of writing in in early 2016.

8 Regulation (EU) No. 1215/2012 of the European Parliament and of the Council of December 12, 2012 on jurisdiction and the recognition and enforcement of judgments (recast), which applies to proceedings instituted on or after January 10, 2015.

8 See Roche Products Limited and others v Provimi Limited [2003] EWHC 961 (Comm); Cooper Tire & Rubber Company Europe Limited and others v Dow Deutschland Inc and others [2010] EWCA Civ 864; and KME Yorkshire Limited and others v Toshiba Carrier UK Ltd [2012] EWCA Civ 1190.

9 Emerson Electric Co and others v Morgan Crucible Company PLC [2012] EWCA Civ 1559.

10 Note, further, that the Court of Justice held in C-352/13 – CDC Hydrogen Peroxide v Evonik Degussa GmbH (EU:C:2015:335) that claimants can rely on an anchor defendant to claim jurisdiction even where that anchor defendant withdraws from the proceedings. The Court of Justice also held that Article 7(2) of the Brussels Regulation enables claimants to bring claims in the courts of the place where the cartel/agreement was concluded or harm is suffered; harm will generally be deemed to be suffered in the place of the victim’s registered office.

11 Sections 2 and 9, Limitation Act 1980.

12 Section 32, Limitation Act 1980.

13 Johnson v Chief Constable of Surrey (CA, unreported, November 23, 1992).

14 Arcadia and others v Visa Inc and others >[2014] EWHC 3561 (Comm), [2015] EWCA Civ 883.

15 Section 47E, 1998 Act. Note that the limitation period for Scottish proceedings is five years (Section 47E(2)(b)).

16 Competition Appeal Tribunal Rules 2003 (S.I. No. 2003/1372); see rule 31(1)-(3).

17 Rule 119, CAT Rules.

18 Directive 2014/104/EU of the European Parliament and of the Council of November 26, 2014 on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union.

19 CPR 52.3(6).

20 Sections 49(1A)-(1C), 1998 Act

21 While it is unclear how such appeals will be approached by the courts, it is possible that challenges to CAT certification decisions will be limited to judicial review proceedings.

22 Rules 78(1)-(3) of the CAT Rules.

23 Rules 79(1)-(2) of the CAT Rules.

24 Rule 79(3) of the CAT Rules.

25 Section 47B(12) of the 1998 Act.

26 Sections 47C(1)-(2) of the 1998 Act.

27 Rule 98 of the CAT Rules.

28 Section 47C(8) of the 1998 Act. Damages-based agreements are agreements between the client and their representative that the representative’s fee is contingent on the success of the case and is determined as a percentage of the damages received by the client.

29 CPR 19.6.

30 [2009] EWHC 741 (Ch); decision upheld on appeal [2010] EWCA Civ 1284.

31 CPR 19.10–19.15.

32 Note that, in the context of public enforcement, this standard of proof is to be applied bearing in mind that infringements of competition law are quasi-criminal matters attracting severe financial penalties (Napp Pharmaceuticals v DGFT [2002] CAT 1 and Attheraces v BHB [2005] EWHC 3015 (Ch)). Therefore, evidence of the infringement must be “commensurately cogent and convincing.”

33 European Commission infringement decisions are binding on national courts (Article 16(1) of Regulation 1/2003); findings of fact made by the CMA in the course of an investigation are binding once the time for appealing the findings has expired, or the findings have been upheld on appeal, unless the High Court or CAT otherwise directs (Section 58(1) of the 1998 Act); infringement decisions of the European Commission, the CMA and the CAT are binding in the High Court or the CAT once they have become final (Section 58A of the 1998 Act).

34 Ferrexpo v Gilson Investments [2012] EWHC 721. Note also that Article 9 of the Damages Directive provides that a decision of a national competition authority will constitute at least prima facie evidence of an infringement when relied on before a court of another Member State.

35 Judgment of the Court (Third Chamber) of July 13, 2006. Vincenzo Manfredi v Lloyd Adriatico Assicurazioni SpA (C-295/04), Antonio Cannito v Fondiaria Sai SpA (C-296/04) and Nicolò Tricarico (C-297/04) and Pasqualina Murgolo (C-298/04) v Assitalia SpA.

36 By way of example, in the Emerald Supplies case, British Airways was sued as the sole defendant in the High Court for damages allegedly suffered in relation to a cartel in which British Airways and a number of other airlines were alleged to have been party (Emerald Supplies Ltd v British Airways plc [2009] EWHC 741 (Ch)). British Airways sought to join 32 other airlines to this action, although it later discontinued its attempts to join the airlines that were not ultimately addressees of the European Commission’s decision.

37 See also, IMI v Delta [2015] EWHC 1676 (Ch), which considered whether a defense could be raised to a contribution claim where the claimant had a defense available to it in the main claim. The Court held that the defense could not be raised in the contribution proceedings as the court must proceed on the basis that the claimant had proved all elements of its pleaded case in the main proceedings.

38 Note that privilege extends to in-house lawyers in the UK.

39 CPR 31.16.

40 CPR 31.17.

41 Where disclosure is sought from the European Commission, the Transparency Regulation (Regulation (EC) No. 1049/2001) should also be considered.

42 CPR 31.22.

43 Rules 62–63 of the CAT Rules.

44 See: Emerald Supplies Ltd v British Airways plc [2009] EWHC 741 (Ch), National Grid Electricity Transmission plc v ABB Ltd [2011] EWHC 1717 (Ch), WM Morrison Supermarkets plc v MasterCard Inc & Others [2013] EWHC 3271 (Comm) (para. 20), DB Schenker Rail (UK) v Hoffman & Co Elektrokohle AG [2014] CAT 2, Secretary of State for Health and others v Servier Laboratories and others [2015] EWHC 647 (Ch).

45 See Mr. Justice Roth in respect of the Air Cargo cartel ( and Emerald Supplies Ltd v British Airways plc [2009] EWHC 741 (Ch).

46 Article 6 of the Damages Directive.

47 Case 360/09 Pfleiderer AG v Bundeskartellamt [2011] ECR I-5161.

48 Case C-536/11 Bundeswettbewerbsbehörde v Donau Chemie AG (ECLI:EU:C:2013:366).

49 National Grid Electricity Transmission v ABB & Others [2012] EWHC 869 (Ch).

50 Article 15(1) of Regulation 1/2003. See also Commission Notice on the co-operation between the Commission and the courts of the EU Member States in the application of Articles [101 and 102 TFEU], as amended by Communication from the Commission – Amendments to the Commission Notice on the cooperation between the Commission and courts of the EU Member States in the application of Articles [101 and 102] (2015 Amendment).

51 Wm. Morrison Supermarkets plc &Others v MasterCard Incorporated & Others (opinion of May 5, 2014); Secretary of State for Health & Others v Servier Laboratories Ltd & Others (opinion of December 22, 2014); Sainsbury’s Supermarkets Ltd v MasterCard Incorporated & Others (opinion of October 29, 2015).

52 Article 15(3) of Regulation 1/2003. The European Commission submitted written observations to the English courts in National Grid Electricity Transmission plc v ABB Ltd and others (2011) and Morgan Advanced Materials v Deutsche Bahn (2014).

53 Paragraph 3 of the CPR Competition Law Practice Direction and rules 33(7), 35(6), 36(4), 74 and 76(6) of the CAT Rules.

54 Paragraph 3 of the CPR Competition Law Practice Direction and rules 50(2) and 74 of the CAT Rules.

55 Regulation (EC) 1049/2001 of the European Parliament and of the Council of May 2001 regarding public access to European Parliament, Council and Commission documents.

56 Article 4(2) Transparency Regulation. See: Case T-437/08 CDC Hydrogene Peroxide v European Commission [2011] ECR II-8251, Case C-365/12 Commission v EnBW and Case T-380/08 Netherlands v Commission

57 CPR 31.16 and rule 62 of the CAT Rules.

58 Hutchison 3G UK Ltd v Vodafone Ltd, 02 Ltd, Orange Personal Communications Services Ltd, T-Mobile UK Ltd [2008] EWHC 50.

59 [2007] EWCA Civ 50.

60 Rule 58 of the CAT Rules.

61 The first application for fast track designation was made in Case 1243/5/7/15 – NCRQ Ltd v Institution for Occupational Safety and Health, although the proceedings settled before the application had been determined.

62 The costs implications of certain offers to settle are governed by CPR Part 36 in the civil courts (“Part 36 Offers”) and rules 45-49 of the CAT Rules in the CAT (“Rule 45 Offers”). The cost shifting consequences of a Rule 45 Offer in the CAT do not apply to collective proceedings (rule 74(c) of the CAT Rules).

63 Rule 58(2)(b) of the CAT Rules.

64 Section 45 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (“LAPSO 2012”); Section 47C(8) of the 1998 Act.

65 Regulation 4(2)(b) and (3) of the Damages-based Agreements Regulations 2010 (SI 2010/1206). Note that a 25% cap applies in personal injury cases.

66 Section 44 of LAPSO 2012. Success fees are recoverable for CFAs entered into before April 1, 2013. LAPSO also provides certain exceptions to the non-recoverability rule, none of which are likely to be relevant to competition claims (in any event, the relevant statutory provisions were not in force at the time of writing).

67 Section 46 of LAPSO 2012.

68 See, for example, Sections 44-45 of LAPSO.

69 ET Plus SA v Welter [2006] LWR 251.

70 Sections 49A-49B of the 1998 Act; rules 94-97 of the CAT Rules.

71 Rules 94(9) and 97(7) of the CAT Rules.

72 Section 49C-49E of the 1998 Act. The redress scheme procedure is set out in the Competition Act 1998 (Redress Scheme) Regulations 2015, and elaborated on in the CMA’s Guidance on the approval of voluntary redress schemes for infringements of competition law (CMA 40).

73 [2005] 3 All ER 613.

74 [2008] EWCA Civ 1086.

75 [2004] EWCA Civ 637. In this case, the House of Lords overturned the damages award on the basis that there was breach, but did not comment on the approach to quantification taken by the Court of Appeal.

76 [2006] CAT 29.

77 [2012] CAT 19.

78 [2013] CAT 6.

79 Tesco Stores Ltd and others v MasterCard Incorporated [2015] EWHC 1145.

80 2 Travel Group PLC (in liquidation) v Cardiff City Transport Services Limited [2012] CAT 19.

81 American Cyanamid Co v Ethicon Limited [1975] 2 WLR 316.

82 [2013] EWHC 3379 (Ch).

83 [2013] EWHC 264 (Ch), upheld on appeal [2013] EWCA Civ 1338.

84 [2015] EWHC 2235 (Ch).

85 For earlier examples, see Adidas v ITF [2006] EWHC 1318 (Ch) and AAH Pharmaceutical Ltd v Pfizer Ltd [2007] EWHC 565 (Ch).

86 For further detail on the Damages Directive, see the relevant chapter of this guide.