The Court of Appeal vindicates the use of joint expert evidence in competition claims
On 5 June 2024, the Court of Appeal delivered its judgment in PSA Automobiles SA v Autoliv AB [1], a landmark judgment concerning the reliance on joint expert evidence in multi-defendant competition cases.The appeal arose from a ruling by the Competition Appeal Tribunal (“CAT”) dated 2 November 2023 [2] that required the defendants in a cartel damages claim to instruct a single joint economic expert on the issues of overcharge, pass-on and financing losses, and a further judgment of the CAT dated 22 April 2024 [3] on the same issue.
This judgment by the Court of Appeal vindicates the first cartel damages claim in which the CAT has ordered defendants to rely on the evidence of a single, joint economic expert on the issue of overcharge. Given the centrality of such evidence in all competition damages claims, the impact of the judgment is far-reaching:
It reinforces the principle that judicial efficiency and proportionality can sometimes necessitate the use of joint experts, even in heavy and complex cases.
It sets a precedent that is likely to simplify litigation processes in future competition cases, reducing the cost of legal proceedings, reflecting a pragmatic approach that aligns with broader trends in judicial case management, especially in the CAT.
It presents practical advantages for claimants specifically, as the onus has now shifted to the defendants to demonstrate why multiple experts should be permitted.
Defendants are likely to have to compromise on their choice of economist at the outset of proceedings and not always instruct their preferred firm, for example the one which may have assisted them in earlier regulatory proceedings.
The judgment further holds that even the existence of a conflict of interest between defendants is at most a relevant factor but is not sufficient to rule out the use of joint experts in competition cases.
Background
The underlying proceedings brought by car manufacturer Stellantis involve a standalone claim for damages against the Autoliv and ZF/TRW groups (and formerly Tokai Rika), alleging a cartel among manufacturers of occupant safety systems (“OSS”), such as seat belts and airbags. The claim relies, in part, on two European Commission decisions [4] which identified cartels in relation to OSS components sold to car manufacturers other than Stellantis. The claim is due to go to trial for six weeks starting in October 2024.
At a Case Management Conference in March 2023, the CAT raised for the first time the possibility of directing that the Defendants should call a single joint expert in the field of competition economics for the trial in October 2024, and made an Order to that effect on 15 May 2023. The CAT’s view was that it was highly unsatisfactory that the Claimants or the CAT should have to consider what would then have been three different economic models from what were then three distinct groups of Defendants. However, the CAT appreciated it had not heard full arguments on the issue and gave the Defendants liberty to apply against the Order.
The Autoliv and ZF/TRW Defendants made that application, which was heard on 20 October 2023. The application failed and the CAT’s ruling was given on 2 November 2023. The main focus of the CAT’s ruling was on case management. The CAT noted the governing principles specified in rule 4 of the CAT Rules 2015, which provides that the CAT shall “seek to ensure that each case is dealt with justly and at proportionate cost”, and that the CAT will further take into account the principles and procedures in CPR Part 35 on expert evidence. In view of this, the CAT set out the following three factors impacting the approach to follow:
Just and proportionate: when exercising its powers to limit expert evidence, the overriding consideration for the CAT is to ensure that the proceedings are dealt with justly and at proportionate cost.
Material conflict of interest: to decide what is just, there must be a consideration of whether there is a real – and not merely theoretical – risk of a conflict of interest in relation to the issues for which expert evidence would be adduced.
Complexity of the case: regard should also be given to the complexity of the proceedings, the potential for multiple and unreconciled expert opinions arising, and the expectation that better quality justice will be administered where disputes are appropriately focused and streamlined.
Applying these factors to the case before it, the CAT refused the Defendants’ application to rely on separate economic experts.
On 6 February 2024, permission to appeal the 2 November 2023 ruling was given by Popplewell LJ in relation to the concerns about material conflicts of interest, but refused on the separate ground that the Defendants’ rights of the defence (under Article 48 of the Charter of Fundamental Rights of the European Union) were engaged in determining the right of each Defendant to rely on its own expert.
On 28 March 2024, the Claimants served their expert’s report. After these events, on 15 April 2024, the Defendants applied to the CAT to revisit the expert question in the light of these developments, asking for permission to rely on separate economic experts, albeit only on the issue of overcharge (as the Defendants had already agreed to instruct a single joint expert on the issues of pass-on and financing losses). The CAT similarly rejected that application in a ruling dated 22 April 2024, which the Defendants also appealed.
Decision of the Court of Appeal
The Court of Appeal unanimously upheld the CAT's two rulings, confirming that the CAT had acted within its discretion.
However, the Court went much further than the test initially applied by the CAT and found that, on the matter to which the expert evidence is directed, even the existence of a material conflict of interest between the relevant parties is no ��trump card”, since CPR Part 35 encompasses claims in which single joint experts are appointed for both claimants and defendants, a situation in which there is a “manifest conflict of interest”. This is the case for instance in property valuation disputes where “the property in question is often the most contentious and crucial issue in the case”.[5] Accordingly, and in light of the expert’s overriding duty to the court, the Court of Appeal confirmed that the principles applicable to single joint experts are no different from the conventional case management approach of dealing with cases “justly at a proportionate cost, conditioned only but importantly by the duty to restrict expert evidence to that reasonably required to resolve the dispute.”[6]
In the process, the Court distinguished UK Trucks Claim Limited v Stellantis NV & Others [7], which the Defendants had submitted as an authority for the proposition that, in the context of a collective claim, the existence of a conflict of interest between purchasers of new trucks and purchasers of used trucks necessitated the appointment of separate experts. However, the Court explained that the fundamental problem identified in UK Trucks was that the expert would be instructed by a single class representative (RHA) with “divided loyalty”. In other words, “the conflict of interest inside RHA was a key reason why a single expert instructed by that single organisation could not give evidence for both classes”, as opposed to any issue related to a conflict of interest between parties. [8]
The Court also clarified the principles guiding such case management decisions, emphasising the importance of avoiding theoretical risks and focusing on real, substantive conflicts of interest. It noted that streamlined expert testimony could enhance the quality of justice by providing clear, comprehensive evidence without unnecessary duplication and complexity, and that indeed “the court or Tribunal is right and entitled to look at the matter from the point of view of the judges who will try the case, and not simply from the point of view of the parties.” [9]
The Court observed that this point was made even more apparent when considering what the CAT was originally faced with in its ruling dated 2 November 2023, with one claimant group and three defendant groups, and therefore potentially six distinct sets of disputes on economic evidence as between (i) the claimants and the defendants’ individual experts, and (ii) between the defendants’ individual experts. Conversely, the CAT’s order of a single joint expert meant the CAT would only need to resolve “a single set of disputes …. between the approaches of the pair of modelling experts (one from the claimant and one from the defendants).”[10]
The Court did however identify the following two narrow exceptions to the principles above:
The Court acknowledged that, in “extreme” cases, if a single expert would “effectively disable” a party from prosecuting or defending its case, then separate experts would be required. However, Court thought this situation would not be a common one.[11]
The Court agreed that, if there were more than one school of thought on the relevant field of expertise, then separate experts may be permitted. However, such difference in approach would need to be “very different from the kinds of differences of opinion one sees with expert evidence generally.”[12] In other words, a difference in opinion on data points to put into an econometric model is not enough.
Comment
This judgment sets a crucial precedent that may streamline future competition law cases, potentially reducing litigation costs and procedural delays. The decision rebuts the notion that separate expert testimony is a default right, and places the onus on defendants to demonstrate the necessity for multiple individual experts. The impact of this judgment is accordingly not limited to competition claims, and sets an important precedent for civil litigation as a whole, in respect of any case where expert evidence is likely to play a key role.
The Court of Appeal’s emphasis on efficiency and proportionality aligns with broader trends in private enforcement, reflecting a pragmatic approach to complex economic evidence. For claimants, the ruling simplifies the litigation landscape, offering a simpler path to proving their claims without the procedural hurdle that reconciling or responding to multiple conflicting expert reports typically entails. For defendants, the ruling means they will likely have to compromise with respect to their preferred economists at the outset of a competition case. It implies that even contribution proceedings between defendants, might not present enough of a conflict of interest to justify departing from the use of joint experts in competition cases.
Authors: Tom Bolster and Charles Laporte-Bisqit
Footnotes
[1] [2024] EWCA Civ 609.
[2] [2023] CAT 66.
[3] [2024] CAT 27.
[4] AT.39881 – Occupant Safety Systems supplied to Japanese Car Manufacturers and AT.40481 – Occupant Safety Systems (II) supplied to the Volkswagen Group and the BMW Group.
[5] [2024] EWCA Civ 609, paragraphs 49-50.
[6] [2024] EWCA Civ 609, paragraph 58.
[7] [2023] EWCA Civ 875.
[8] [2024] EWCA Civ 609, paragraph 55.
[9] [2024] EWCA Civ 609, paragraph 57.
[10] [2024] EWCA Civ 609, paragraph 67.
[11] [2024] EWCA Civ 609, paragraph 61.
[12] [2024] EWCA Civ 609, paragraph 63.
18 September 2024
