Neutral Citation Number
Judgment of the Tribunal in relation to two applications for a Collective Proceedings Order pursuant to s. 47B of the Competition Act 1998 in respect of damages claims resulting from a cartel. The first application is brought by UK Trucks Claim Ltd (“UKTC”), a special purpose vehicle set up to pursue these claims. The second application is brought by the Road Haulage Association Limited (“RHA”), the well-known trade association of those engaged in the haulage industry.
By its decision in Case 39824 - Trucks adopted on 19 July 2016 (the “Decision”), the European Commission found that five major European truck manufacturing groups had carried out a single continuous infringement of Article 101 of the Treaty on the Functioning of the European Union and Article 53 of the EEA Agreement over a period of 14 years between 1997 and 2011.
The Decision was a settlement decision adopted pursuant to the procedure set out in Article 10a of Regulation 773/2004/EC and the addressees of the Decision all admitted their involvement. The infringement concerned, inter alia, the exchange of information on future gross prices and collusion on the timing and passing on of costs of the introduction of emission technologies required by EURO 3 to 6 standards for trucks weighing 6 or more tonnes, referred to as “medium and heavy trucks”. The Decision imposed fines in aggregate of a little over €2.9 billion.
Both the UKTC and RHA applications seek follow-on damages alleged to arise from the infringement found by the Decision. However, in addition to the different character of the two applicants, there are a number of key differences between the applications. In particular:
- UKTC seeks to bring collective proceedings on an opt-out basis (its Claim Form presented opt-in proceedings as a second-best alternative, but that was not vigorously pursued). The RHA seeks to bring collective proceedings on an opt-in basis.
- UKTC proceedings seek an award of aggregate damages. The RHA proceedings do not.
- UKTC proceedings cover only new trucks. The RHA proceedings cover both new and used trucks.
- UKTC proceedings cover trucks acquired in the UK. The RHA proceedings extend also to trucks acquired in the EEA so long as the acquirer belongs to a group of companies that also acquired trucks in the UK.
- UKTC’s proposed class definition includes those who acquired trucks between 17 January 1997 and 18 January 2011 (i.e. the period of the infringement) but allows for a ‘run-off period’ to the end of 2011 before prices are assumed to have returned to competitive levels. Therefore it covers also any further trucks acquired by those proposed class members (“PCMs”) up to 31 December 2011. The proposed class definition in the RHA’s amended Claim Form assumes a much longer run-off period and the class covers those who acquired trucks up to 17 May 2019.
- Both proceedings comprise claims by those who acquired trucks for use in providing carriage either as a haulier for third parties or in their own business and both proceedings exclude truck dealers. But beyond that, they define the proposed class differently in terms of exclusions.
- The RHA proceedings seek to cover claims for loss allegedly caused by delay in the introduction of new EURO emissions technology that resulted in additional fuel costs. The UKTC proceedings do not claim for such a distinct head of loss but UKTC’s application proposes as a common issue the impact of this aspect of the cartel on class members “in terms of operational costs or otherwise”.
- UKTC relies on an expert report from Dr Andrew Lilico and the RHA relies on an expert report from Dr Peter Davis. Dr Davis and Dr Lilico approached the estimation of loss by very different methodologies.
The Tribunal held that the claims are in principle eligible and suitable for inclusion in collective proceedings, and therefore the Tribunal had to determine which of the two applications was preferable. The Tribunal reached the clear view that the RHA opt-in proceedings are preferable to the UKTC opt-out proceedings, or even to the UKTC proceedings on an opt-in basis:
- The alternative approaches of Dr Davis and Dr Lilico satisfied the test for evaluation of the expert evidence set out by the Supreme Court of Canada in Microsoft, but the Tribunal felt more confidence in the robustness of the method proposed by Dr Davis. In part, that was because the use of regression analysis is well tested and widely acknowledged. But more significantly, it was because the RHA is proposing opt-in proceedings which will give Dr Davis access to a significant volume of data from the class members, which he can therefore deploy for the purpose of sophisticated analysis that takes more account of the heterogeneity of the trucks market.
- It is practicable for the proceedings to be brought as opt-in proceedings. The RHA has established a website dedicated to the proceedings, providing information and offering a platform for PCMs to register their interest and sign up. A significant number of operators have already signed up and many more are in the process of doing so or have registered their interest.
- The Tribunal dismissed the Proposed Defendants’ argument that the RHA application was unsustainable because the inclusion of claimants for both new and used trucks in the class would give rise to an irreconcilable conflict of interest on the part of the RHA and its legal advisors (claims in respect of new trucks would face the pass-on argument that all or part of the overcharge would be recovered in an enhanced price that could be charged on re-sale of the truck after a period of use; and claims in respect of used trucks were dependent on establishing such a pass-on by way of an overcharge in the used price). The Proposed Defendants pointed to strong statements in the Canadian jurisprudence to the effect that there cannot be fundamental conflicts of interest in the certified class. The Tribunal considered that there are two important and related distinguishing features of the RHA action: (i) the RHA seeks certification of opt-in proceedings and this distinction is fundamental because in opt-out proceedings the class representative has no direct engagement with the class members it is representing and they will nonetheless be bound; and (ii) it is very relevant that there is a substantial overlap between PCMs who acquired new trucks and PCMs who acquired used trucks - these are not two discrete categories. The Tribunal did not think it appropriate to identify sub-classes at the certification stage.
- The run-off period should not extend to 17 May 2019, and the relevant period should cover only contracts entered into by 31 January 2014 for new trucks and by 31 January 2015 for used trucks. The Tribunal considered that it is necessary to reach a view for the purpose of certification and avoid an over-broad class definition.
This is an unofficial summary prepared by the Registry of the Competition Appeal Tribunal.