United Kingdom: Competition Litigation

Claims have traditionally been framed as actions for breach of statutory duty in respect of (i) Articles 101 or 102 of the Treaty on the Functioning of the European Union (“TFEU”), and/or (ii) the equivalent UK domestic provisions, sections 2 and 18 of the Competition Act 1998 (“CA98”) (known as the “Chapter I” and “Chapter II” prohibitions).

Article 101 TFEU prohibits agreements or decisions by associations of undertakings and concerted practices which may affect trade between EU member states and which have as their object or effect the prevention, restriction or distortion of competition. The Chapter I provisions prohibit similar agreements affecting trade within the UK. Article 102 TFEU prohibits the abuse of a dominant position within the EU which may affect trade between EU member states. The Chapter II provisions prohibit similar conduct affecting trade within the UK.

Since the end of the Brexit transition period on 31 December 2020, EU law (including the TFEU) has ceased to be binding in the UK, save in respect of decisions taken before the end of the transition period and domesticated into UK law (“Retained EU Law”) and cases initiated before the end of the transition period in respect of infringements up to the end of the transition period (“Continued Competence Cases”). Given the length of time it takes for cases to complete the EU investigations and appeals process, it is likely that there will continue to be a healthy number of claims in the UK which rely on the TFEU prohibitions, as well as the CA98 prohibitions, for several years.

Claims can be brought on either a follow-on or stand-alone basis. Follow-on claims rely on a prior infringement finding (e.g., a decision by the European Commission (the “Commission”) prior to the end of the Brexit transition period or in a Continued Competence Case, or the UK Competition and Markets Authority (“CMA”)) to establish liability, whereas in a stand-alone claim, liability must be proved by the claimant. In practice, claims may be a hybrid of the two.

In Air Canada & Ors v Emerald Supplies Limited & Ors [2015] EWCA Civ 1024, the Court of Appeal struck out an attempt to base claims on the economic tort of unlawful means conspiracy on the basis that the requisite intention to injure the claimants (who were indirect purchasers of the allegedly cartelised services) could not be established.

Claims can be brought either before the High Court or the Competition Appeal Tribunal (the “CAT”) (see question 6). Claims brought before the High Court are subject to the Civil Procedure Rules (“CPR”), while claims brought before the CAT are subject to the CAT Rules 2015 (the “CAT Rules”). In each case, proceedings are commenced by the claimant filing a claim form.

Once the claim form is filed, it must be served on the defendant. Where a defendant is outside of the jurisdiction, permission is generally required before service can be effected.

In the CAT, full details of the claim, including a statement of the relevant facts and any contentious points of law relied upon, must be included in the claim form. In the High Court, the claim form typically contains less detail, but full details are then provided in the claimant’s “particulars of claim” (which are usually served on the defendant either with, or shortly after, the claim form). A claimant’s pleadings must set out reasonable grounds for a claim that has a realistic prospect of success, otherwise the claim may be vulnerable to strike-out or summary judgment.

Claimants generally seek an award of damages. In addition, they can seek an injunction (i.e. an order from the High Court or CAT mandating or prohibiting certain action by the defendant) and/or declaratory relief (although at the time of writing claims for declaratory relief cannot be issued in the CAT – the CAT can only hear such claims if they are first brought in the High Court and then transferred to the CAT. For further commentary in this regard, see Wolseley UK Ltd v Fiat Chrysler Automobiles NV [2019] CAT 12, at paragraph 64).

The general rule is that damages are compensatory and should put the claimant in the position it would have been in had the breach of competition law not occurred. In order to assess damages, the courts consider the position of the claimant absent the infringement by constructing a hypothetical reference scenario, or “counterfactual”, against which the actual situation can be compared. This is a complex exercise and the courts will typically rely on expert evidence to assist with quantification (see question 13 below).

An important exception to this is that, when making an award of aggregate damages in a collective action in accordance with the CAT Rules, the CAT is not required to assess the loss of each individual class member (see question 11 below).

Before the implementation of Directive 2014/104/EU (the “Damages Directive”) on 9 March 2017 (the “Implementation Date”), the courts could award punitive or exemplary damages in limited circumstances where the defendant had not been fined by a competition authority. Such damages are no longer available in claims where the relevant infringement started on or after the Implementation Date.

The principle of joint and several liability is recognised in English law: a claimant who has suffered loss as a result of a cartel can claim its entire loss from any one of the cartelists. However, the implementation of the Damages Directive has introduced limitations on this principle (see question 16 below).

The ability of claimants to recover damages is subject to principles of causation and remoteness (the latter of which hinges on the foreseeability of the harm sustained). A claimant’s ability to recover damages may be reduced where they have failed to mitigate or otherwise contributed to their own losses.

Claimants can also be awarded interest (see question 17 below).

The default limitation period is six years from the date on which the cause of action accrued (which will usually be the date on which the relevant loss was suffered). However, this can be extended if a claimant can show that a defendant has deliberately concealed essential facts relevant to the claimant’s cause of action. In that case, limitation will begin to run from the date on which the claimant discovered or could, with reasonable diligence, have discovered, the concealment. The Court of Appeal has recently found that, applied to a cartel case, this requirement means that limitation begins to run when a reasonable person could have a reasonable belief that there had been a cartel (Gemalto Holdings BV v Infineon Technologies AG [2022] EWCA Civ 782).

Where claims are brought and the relevant infringement took place following the implementation of the Damages Directive, the position is slightly different. In such cases, limitation does not start to run until: (i) the infringement has ceased; and (ii) the claimant knows (or could reasonably be expected to know) of the infringement, the identity of the infringer, and that it has suffered loss. The limitation period is suspended during competition authority investigations (including while any appeals are ongoing) and for a period of one year thereafter.

In Case C-267/20 (Volvo AB / DAF Trucks NV), the Court of Justice of the European Union (the “CJEU”) indicated that infringements pre-dating the implementation of the Damages Directive might also be caught by these provisions. Given that this case post-dates Brexit, it is not binding in England and Wales. While the High Court/CAT may nevertheless have regard to it, the UK implementing legislation expressly restricts the new limitation provisions to claims concerning infringements after its introduction so it unlikely to have an impact in the UK.

Special limitation rules apply to follow-on claims before the CAT where the cause of action arose before 1 October 2015. Such claims must be brought within two years from the date on which the infringement decision became final (i.e. once the time for appealing the decision expired or the appeals process concluded). On 1 October 2015, new rules were introduced which extended the CAT’s jurisdiction to include stand-alone claims and aligned the limitation period in the CAT with the general rule described above for claims arising on or after 1 October 2015.

Special limitation rules also apply to claims made in collective proceedings before the CAT (see question 20 below). In particular, the limitation period is suspended from the date on which the collective action is commenced and will only continue running on the occurrence of certain events (e.g. withdrawal or settlement of the claim).

The CAT has recently given a strong indication that, in collective proceedings, the limitation period is interrupted when the claim is filed (not when each class member opts-in to the claim) (UK Trucks Claim Limited v Stellantis N.V. and others; Road Haulage Association Limited v Man SE and others).

Competition damages claims can be commenced in the High Court (which has jurisdiction in England and Wales) or the CAT (a specialist competition claims tribunal with jurisdiction throughout the United Kingdom). Claims in the High Court are typically commenced in the Chancery Division (which has judges with competition law expertise) or the Commercial Court.

It has become common practice for competition damages claims that are commenced in the High Court to be transferred to the CAT (pursuant to section 16 of the Enterprise Act 2002 and Practice Direction 30 of the CPR) either at the instigation of the parties or of the High Court.

(See question 15 below for details of the appeal process.)

The jurisdiction of the High Court/CAT must be determined in accordance with the common law of England and Wales and/or the Hague Convention on Choice of Court Agreements (where applicable).

Under English law, the primary question is whether the defendant can properly be served with proceedings. Where a defendant is considered to be within the jurisdiction, proceedings can be served on that defendant in England and Wales irrespective of whether the claim has any other connection with the jurisdiction. A corporate defendant is considered to be in the jurisdiction, for example, if: (a) it has a place (e.g. a registered office) in England and Wales where it carries on its activities, (b) it has appointed English solicitors to accept service on its behalf, or (c) it has appointed an agent under contract to accept service.

Where the defendant cannot be served in England and Wales, claimants are required to obtain the permission of the English courts to serve proceedings out of the jurisdiction. To do so, claimants will be required to demonstrate the following:

• that they have a good arguable case that each claim falls within one of the permitted “jurisdictional gateways” (for example, because the alleged anticompetitive conduct has given rise to damage sustained within the jurisdiction, or because claims are being brought against multiple defendants as part of the proceedings, one of those defendants can be served with the claim and the other defendants are necessary or proper parties to the claim);
• that the claim has a reasonable prospect of success; and
• that England and Wales is the proper forum for the resolution of the dispute.

Even in cases where the High Court or CAT does have jurisdiction, it may be possible for the defendant to seek a stay of proceedings on forum non conveniens grounds – i.e. because there is another jurisdiction where it would be more appropriate for the proceedings to be heard. Whether or not another jurisdiction can be considered to represent a more appropriate forum is assessed on a case-by-case basis. However, even if the defendant can establish forum non conveniens, a stay may be refused if the claimant can show that it would be unjust (for example, because the claimant would not receive a fair trial in the other jurisdiction).

Where there is a jurisdiction clause in favour of England and Wales, the High Court or CAT will only stay proceedings if there are strong reasons not to hold the parties to that agreement.

Prior to Brexit, questions of jurisdiction in civil and commercial matters in the UK vis-à-vis other member states of the EU were generally governed by Regulation (EU) No 1215/2012 for claims brought on or after 10 January 2015, and by Council Regulation (EC) 44/2001 for claims brought before 10 January 2015. Equivalent rules generally applied where a defendant was domiciled in Switzerland, Iceland or Norway (the “Lugano States”) under the Convention on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters of 30 October 2007 (the “2007 Lugano Convention”). Those rules, under which the High Court has historically adopted an expansive approach to its jurisdiction to hear competition cases, will continue to be applied to cases initiated before 1 January 2021.

The UK has applied to accede to the 2007 Lugano Convention. With the consent of the other 2007 Lugano Convention members, the UK would become a Lugano State (and its approach to jurisdiction would change accordingly). However, the EU has notified the 2007 Lugano Convention depository that it is not in a position to consent to the UK’s application.

The law to be applied to a dispute in the High Court or the CAT depends on the time period relevant to the claim:

1. Article 6(3) of EC Regulation 864/2007/EC (“Rome II”) applies when determining the applicable law for the period after 11 January 2009. According to this provision, the applicable law is that of “the country where the market is, or is likely to be, affected”. Rome II also states that, when the market is, or is likely to be, affected in more than one country, a person seeking compensation for damage who sues in the court of the domicile of the defendant may instead choose to base their claim on the law of the court seised, provided that the market in that country is amongst those “directly and substantially affected by the restriction of competition”. Further, if the claimant sues more than one defendant in that court, the claimant can elect to apply the law of the court against all of the defendants provided that the restriction of competition on which the claim against each defendant is based “directly and substantially affects the market in the Member State of that court”. In Westover Limited & Ors v Mastercard Inc. & Ors [2021] CAT 12, the CAT determined that, given that the alleged restrictive agreement applied in the same way in respect of both national markets at issue in the claim (Italy and the UK), claimants based in Italy were able to elect to have their claims governed by English law.
2. The Private International Law (Miscellaneous Provisions) Act 1995 (the “1995 Act”) applies when determining the applicable law for the period from 1 May 1996 to 10 January 2009. The 1995 Act requires the High Court (or CAT) to weigh up the different aspects of the tort, including: (a) the elements constituting the tort; (b) the countries in which the events comprising those elements took place; and (c) the country in which the most significant events comprising those elements occurred. In Deutsche Bahn AG & Ors v MasterCard Inc. & Ors [2018] EWHC 412 (Ch) (“Deutsche Bahn/MasterCard”), the High Court distinguished competition damages actions from other tort cases and held that the most important element of the tort was the restriction of competition in the market.
3. When determining the applicable law for the period prior to 1 May 1996, the “double actionability” rule applies. This provides that a tort must be actionable under both English law and the law of the place where harm was done (i.e. the lex loci delicti) to give rise to a cause of action. In Deutsche Bahn/MasterCard, the High Court held that the lex loci delicti would be the country in which competition was restricted in competition cases.

The applicable standard of proof for a competition damages action under English law is the civil standard, i.e. “the balance of probabilities”.

It is worth noting that the UK Supreme Court has found that Article 101(3) TFEU imposes requirements as to the nature of the evidence which is capable of satisfying that standard for the purposes of obtaining an exemption under that provision (first imported into UK domestic competition law by section 60 of CA98 and now replaced by section 60A of CA98). In particular, the Supreme Court has indicated that undertakings seeking an exemption under Article 101(3) before the English courts will need to produce “robust analysis and cogent empirical evidence” in support of their claim (Sainsbury’s Supermarkets Ltd v Visa Europe Services LLC & Ors [2020] UKSC 24).

Decisions of the CMA (and UK sectoral regulators with competition powers) are binding on both the High Court and the CAT. This means that if a claimant brings a follow‑on action in reliance on a decision taken by the CMA (or a relevant sectoral regulator), it does not need to establish that the defendant has infringed competition law; it merely has to show that it has suffered loss as a result of the infringement.

Decisions of the Commission reached before the end of the Brexit transition period, or after the end of the transition period in a Continued Competence Case, are also binding on the High Court and the CAT. Decisions of the Commission and/or European courts in respect of investigations initiated after Brexit are not binding on the High Court or the CAT, although the High Court and the CAT may have regard to such decisions.

Decisions of national competition authorities other than the CMA (and UK sectoral regulators) are not binding on the High Court or the CAT. The same applies to decisions taken by UK sectoral regulators otherwise than pursuant to their competition law powers. Those decisions can, however, be treated as evidence that an infringement of competition law has occurred (see for instance the CAT’s decision in Le Patourel v BT [2021] CAT (“Le Patourel/BT”), where provisional findings by Ofcom were accepted as prima facie evidence of excessive pricing).

The High Court and the CAT must not deliver judgments which might conflict with decisions contemplated by the CMA or the Commission in respect of Continued Competence Cases. Proceedings which relate to conduct subject to a regulatory investigation will therefore typically be stayed until the investigation has been completed and the regulator has given its decision. However, the High Court and the CAT are typically inclined to progress private proceedings as far as possible while awaiting the regulator’s decision. Accordingly, parties are likely to be required to file all of their pleadings before a stay is granted and may also need to undertake disclosure and/or exchange of evidence.

A collective action procedure for private actions for breaches of competition law came into force on 1 October 2015. The regime enables claims to be brought on behalf of a class of claimants by a class representative. However, a proposed collective action may only proceed to trial if the CAT makes a “collective proceedings order” (“CPO”). The CPO will also determine whether the collective proceedings will continue on an opt-in or opt-out basis.

A CPO will only be granted where the CAT considers (a) that it is “just and reasonable” for the class representative to act for the class members, and (b) that the claim in question is “eligible” to be brought on a collective basis.

In considering whether it is just and reasonable for the class representative to act, the CAT will consider whether the proposed class representative: (i) would fairly and adequately act in the interests of the class members; (ii) has a material conflict of interest with the class members; (iii) would be the most suitable class representative (if there is more than one applicant seeking approval to act as the class representative); (iv) could pay the defendant’s recoverable costs if ordered to do so; and (v) if an interim injunction is sought, could satisfy any undertaking as to damages required by the CAT. The representative claimant is not required to be a class member, but this will be taken into consideration.

In considering whether the claim is eligible to be brought on a collective basis, the CAT must satisfy itself that the claim: (i) is brought on behalf of an identifiable class; (ii) raises common issues of fact or law; and (iii) is suitable to be brought in collective proceedings (taking into account various practical considerations).

The CAT rejected the first two CPO applications. However, in December 2020, the Supreme Court upheld the Court of Appeal’s decision to overturn the CAT’s refusal to grant a CPO to Walter Merricks in respect of a proposed action on behalf of 46 million consumers concerning MasterCard interchange fees (Walter Merricks CBE v Mastercard Incorporated & Ors [2020] UKSC 51). The Supreme Court found (inter alia) that (i) the CAT had failed to take into account the suitability of collective proceedings relative to the possibility of individual proceedings (which it considered to be the correct test), and (ii) the CAT was wrong to require Merricks’ proposed method of distributing aggregate damages to take account of the individual loss suffered by each class member. More generally, the Supreme Court’s judgment made it clear that there is only a very limited role for the consideration of merits at the certification stage: if a claim cannot be dismissed under the strike-out test (“no real prospect of success”), then it should not be refused certification on merits grounds.

Subsequent decisions of the CAT to grant CPOs, including Le Patourel/BT, Gutmann v South Western Trains [2021] CAT 31, Gutmann v London & South Eastern Railway [2021] CAT 31, McLaren v MOL (Europe Africa) [2022] CAT 18 and Consumers’ Association v Qualcomm [2022] CAT 20 have reinforced the notion that there is limited scope for the CAT to consider merits, the availability of potential defences or the precise methodology for the calculation and distribution of damages at the certification stage.

However, in its recent decision in Michael O’Higgins FX Class Representative Limited v Barclays Bank PLC and Others [2022] CAT 16 and Mr Phillip Evans v Barclays Bank PLC and Others [2022] CAT 16 (together, the “FX litigation”), the CAT held (amongst other reasons) that both claims were so poorly pleaded – to the point that they were liable to be struck out – that it would be more appropriate for the claims to be brought on an opt-in basis (rather than on an opt-out basis, as had been requested).

Alternatively, the CPR permits the High Court to make a “group litigation order” (“GLO”) which provides for individual claims that give rise to common or related issues of fact or law to be managed together. Claims managed under a GLO will be entered on a group register. Unless the court orders otherwise, a judgment or order made in one claim on the group register in respect of a GLO issue is binding on all other claims entered on the register at the time of judgment. The individual GLO claimants may choose to appoint a common legal representative, but this is not obligatory.

Under the general “representative action” procedure, the court can also direct that a claim may be started or continued by one or more persons as representatives of any other person who has the same interest in that claim. Unless the court orders otherwise, any judgment or order given in such a claim is binding on all persons represented in the claim, although it may only be enforced by or against non-represented persons with the court’s permission. This procedure has rarely been used and the Supreme Court finding in Lloyd v Google [2019] EWCA Civ 1599, that the procedure was unsuitable where an individualised assessment of damages was required, means that it will be difficult to bring competition damages claims in this manner in future.

There are also general procedural rules by which parties may seek to consolidate individual proceedings or add third parties to existing proceedings.

Further, the CAT issued Practice Direction 2/2022 in June 2022, giving itself the ability to hear common issues across different claims in “umbrella proceedings”, which it is considering using to hear pass-on issues in the individual retailer claims against Visa and Mastercard alongside the Merricks proceedings.

The pass-on defence is often raised by defendants in competition damages cases and is a key feature of such actions.

In NTN Corporation v Stellantis [2022] EWCA Civ 16, the Court of Appeal held that a defendant looking to plead pass-on as a defence must demonstrate: (a) a legal and proximate causal connection between the harm claimed and the alleged act of upstream or downstream pass-on; (b) that the connection is “realistic” or “plausible” (the two phrases being interchangeable) and carries some “degree of conviction”; and (c) that the evidence is more than merely “arguable”. In practical terms, this means that defendants cannot simply rely on broad assertions or “business theory” and must demonstrate at the pleadings stage that there is a “plausible factual foundation” for the defence.

Once it is established that there is a “plausible factual foundation”, however, the Supreme Court in Sainsbury’s Supermarkets Limited and Ors v Mastercard Inc. and Ors [2020] UKSC 24 found that, while the burden of proof is on the defendant to establish that the claimant has passed on any unlawful overcharge “there is a heavy evidential burden on the [claimant(s)] to provide evidence as to how they have dealt with the recovery of their costs in their business” and that, if the claimant does not adduce such evidence, “adverse inferences” can be drawn against it (§216). The Supreme Court also found that “the law does not require unreasonable precision” in the proof of the amount of the prima facie loss which claimants have passed on (§225), meaning that a “broad axe” can be wielded to determine quantification of pass-on in the same way that it can be wielded to determine quantification of damages.

In the case of claims governed by the Damages Directive, a defendant seeking to rely on the defence has the burden of proving the existence and extent of the pass-on. Where the existence of the claim depends on the overcharge having been passed-on, the burden lies with the claimant (but there is a rebuttable presumption that the overcharge has been passed-on to indirect purchasers).

Expert evidence is permitted with the court’s permission. Experts are appointed by the parties and owe duties to them to e.g. exercise due care and skill, comply with any relevant code of ethics, act independently, and inform the parties of relevant conflicts of interest. However, the experts’ primary duty is to help the court by providing objective and unbiased opinions on matters within their expertise, and this duty to the court overrides any duties to the parties.

Each party will usually appoint its own expert, although it is possible (albeit rare in competition cases) for the court to order a single expert to be jointly instructed. Where the parties have their own experts, they typically exchange expert reports and then meet with the aim of producing a joint statement for the court, detailing the points on which they agree or disagree. Experts are then cross-examined at trial. This can be done separately, or the court may order the parties’ experts to give evidence concurrently in a process known as “hot-tubbing”, whereby the experts are cross-examined by the parties and the judge (or tribunal) simultaneously.

Expert evidence is a feature in virtually all competition litigation cases given the complexity of issues, particularly around the identification of the appropriate counterfactual and issues relating to quantification of damages (including pass-on). Experts from a variety of fields may be engaged, but typically include economists, industry experts and forensic accountants.

High Court cases are usually heard by a single judge. Claims in the CAT are generally heard by a three-member panel: a chairman and two ‘ordinary members’. The chairman is usually a judge of the High Court. The ordinary members may be drawn from a wider pool of lawyers, accountants, economists and other experts. Neither forum uses juries in competition cases.

Rules of evidence are found in the CPR (for High Court claims), the CAT Rules 2015 (for matters in the CAT), the corresponding guides for the CAT, Commercial Court and Chancery Division (as applicable) and in the common law. Parties typically exchange written statements from factual and expert witnesses in advance of trial, as well as any other documentary evidence (please refer to question 21 for details of the disclosure process). Those witnesses confirm the accuracy of their written statement at the trial and are usually then cross-examined by the opposing party’s counsel. The approaches in the High Court and CAT are similar, although the CAT has specific powers to limit cross-examination as it sees fit (CAT Rules 2015, Rules 21(7) and 55(6)).

In April and November 2021, the High Court and CAT, respectively, introduced new practice directions regarding the form and content of witness statements prepared for use at trial. In particular, the practice directions emphasise the need for witness statements to be in witnesses’ own words, be limited to matters within the knowledge and recollection of the witnesses, refrain from arguing the parties’ cases and refrain from simply taking the High Court or CAT through documents. High Court cases since the introduction of the practice direction show that it is taking the various requirements seriously.

Timing will vary depending on the status of regulatory appeal proceedings, volume of evidence, complexity of the issues and the number of parties. Competition damages cases tend to take longer than commercial cases. A ‘typical’ case will normally take around 18 months to two years to reach the trial stage. More complicated cases or those in which related regulatory appeal proceedings are pending can take several years to reach trial, and fast-track procedures are available for smaller matters.

In respect of collective actions, cases decided since the Supreme Court decision in Merricks suggest that it can take anywhere from eight to fifteen months for certification to be determined. It remains to be seen how long a case will take to reach trial following a CPO being granted.

Appeals against a High Court judgment or CAT decision can be made to the Court of Appeal (or, for CAT decisions in Scotland, the Court of Session). Permission to appeal must be obtained from the High Court or CAT at first instance, or, if this is refused, from the Court of Appeal itself. Appeals may only be made in respect of: (i) points of law; (ii) a finding of breach of competition law (in standalone claims); (iii) the award of amount of damages; or (iv) the issuing of an injunction. Appeals against High Court judgments may only be made by the parties to the dispute; appeals from the CAT may be made by anyone with sufficient standing.

Subsequently, a further appeal can be made to the Supreme Court, but only on a point of law of general public importance. This requires permission from the Supreme Court itself.

Historically, a successful leniency application provided no protection from civil claims for damages brought by victims of the infringement.

However, following the implementation of the Damages Directive, some limitations on the liability of immunity recipients have been imposed. Immunity recipients will generally only be liable for the harm caused to their direct and indirect purchasers, but will not be jointly and severally liable for the entire harm caused by the infringement (except where the remaining ‘co-infringers’ are unable to fully compensate the other victims of the infringement). As such, they will also generally be protected from contribution claims from co-infringers. However, this protection only extends to immunity recipients and they are likely to have to wait several years to determine the full extent of their liability. This protection only applies in the context of proceedings commenced on or after 9 March 2017, where the relevant infringement and harm also occurred on or after that date.

Damages are compensatory, aiming to put the claimant (or the class as a whole in the case of aggregate damages in collection actions – see question 11 above) in the position it would have been in had the breach of competition law not occurred. This may include the claimant’s lost profits.

Under EU law, claimants may seek ‘umbrella’ damages, i.e. they can claim for purchases made from firms that did not participate in the cartel, on the basis that the cartel inflated the market price, enabling non-cartelist firms to charge higher prices to their customers as a result (see Case C-557/12 Kone AG & Others v OBB-Infrastruktur AG (2014)).

No clear evidential preference has emerged in relation to quantifying damages. Assessment of damages can range from consideration of complex econometric evidence adduced by expert economists to narrative evidence put forward by factual witnesses. The CAT in particular has previously reserved its position to interpret expert economic evidence in light of its own assessment of the case.

The High Court and CAT have broad discretion as to the rate of interest awarded and this is often disputed between the parties. Interest may be awarded on a compound or simple basis but, again, this depends on the facts of each case. A claimant seeking compound interest will typically have to claim for it as an independent head of loss and provide evidence demonstrating how the sums claimed would have been used in the counterfactual (Merricks v Mastercard Inc [2021] CAT 28 applying Sempra Metals v HMRC [2007] UKHL 34).

English civil law grants defendants a general right to seek contribution from any other defendant (or third party) which is liable for the same damage. The contribution of any one party may be up to 100% of the damages awarded; the proportion is based on a flexible test of what is ‘just and equitable’ based on the evidence.

The implementation of the Damages Directive amends this general position for competition claims on or after 9 March 2017 in three principal ways: (i) if one defendant reaches a settlement with respect to the share of the damage attributable to them, the other defendants cannot seek a contribution from the settling defendant; (ii) defendants which have received immunity have a partial exemption (see question 16 above); and (iii) the “just and equitable” test is replaced with an assessment of the “relative responsibility for the whole of the loss or damage caused by the infringement”.

As demonstrated by the recent Court of Appeal decision in Samsung v LG Display [2022] EWCA Civ 423, the fact that competition damages proceedings have been heard in England and Wales does not mean that it will necessarily be considered the appropriate forum for the resolution of a subsequent contribution claim which is separate from the original proceedings.

The most common way for a competition damages claim to be resolved without a trial is by means of a settlement between the parties.

Aside from settlement, in the High Court, there are two principal mechanisms which defendants can use to dispose of claims (wholly or in part) without a full trial: summary judgment and strike-out.

Summary judgment may be given where the claim has no real prospect of success and where there is no other reason for the claim to go to trial. A “real” prospect of success does not mean that the claim will probably succeed at trial; rather, there needs to be a “real” as opposed to “fanciful” prospect of the claim succeeding.

A claim may be struck out in four principal circumstances: (i) where the statement of case discloses no reasonable grounds for bringing or defending the claim; (ii) where it amounts to an abuse of process (e.g. if judgment has already been handed down on the same dispute); (iii) where it is vexatious, scurrilous or obviously ill-founded; or (iv) where the claimant has failed to comply with a rule, practice direction or court order. In Bao Xiang International Garment Centre v British Airways [2015] EWC 3071 (Ch), the High Court struck out competition damages claims brought on behalf of c. 64,000 claimants on the basis that the claims had been issued without the authority of the entities in question.

The CAT has broadly similar powers of strike-out and summary judgment under the CAT Rules, as the CAT itself has noted (see Wolesley/FCA and, more recently, the FX litigation).

Competition damages claims can also be disposed of without a full trial where: (i) a party successfully challenges the jurisdiction of the High Court or CAT, (ii) in the case of a CPO, the CAT refuses to grant certification, (iii) a limitation defence, or another potentially determinative point, is decided as a preliminary issue, or (iv) the claimants discontinue their claims.

Collective settlement is possible under the CAT’s collective actions regime (see question 11). A collective settlement must be approved by the CAT in order to be binding, which it will do if it is satisfied that the settlement terms are “just and reasonable” having regard to the size of the class covered by the settlement, the amount and terms of settlement, the likelihood of a higher amount being awarded at trial and the likely cost and duration of trial. In assessing this, the CAT may have regard to submissions by the parties’ experts, legal counsel and any individual class member. The settlement can include parties outside of the UK, provided that they have opted in to the proceedings.

The parties to English proceedings must generally disclose the existence of all documents which are or have been in their control and which harm or support their own or another party’s case.

Following the implementation of the Damages Directive, a party cannot be required to disclose either a settlement submission made to a competition authority which has not been withdrawn or a cartel leniency statement. A prohibition on disclosure also applies to a competition authority’s investigation materials until after the investigation is closed.

A party is entitled to withhold privileged documents from inspection by the other side. The most important category of privilege is “legal professional privilege”. This includes: (i) “legal advice privilege”, which protects confidential communications between a lawyer (whether in-house or external) and their client which come into existence for the purpose of giving or receiving legal advice; (ii) and “litigation privilege”, which protects confidential communications between a client and its lawyer, or between a client (or its lawyer) and a third party which come into existence for the dominant purpose of obtaining information or advice in connection with the conduct of pending, reasonably contemplated or existing litigation. In cases where there are multiple defendants, those defendants will typically be able to share such documents with each other on a common interest basis without waiving privilege as against the claimants.

Documents cannot be withheld from inspection on grounds of confidentiality. Pursuant to the CPR and CAT Rules, a party to whom a document is disclosed may only use that document for the purposes of the proceedings in which it is disclosed, unless: (i) the document has been referred to in an open hearing; (ii) the High Court or CAT (as applicable) has given permission; or (iii) the party who disclosed the document and the person to whom the document belongs agree. In practice, the confidentiality of commercially sensitive documents is commonly safeguarded further by disclosing them into a “confidentiality ring”, which restricts access to a limited number of persons who are typically required to sign confidentiality undertakings. Additional protective measures may be taken in respect of hearings, such as asking the court to go into private session while a confidential document is referred to. However, in a recent ruling in an appeal against a CMA infringement decision, the CAT has made clear that a much more stringent confidentiality test applies in the CAT compared with a CMA investigation: in the CAT there must be evidence of material harm to third parties (BGL (Holdings) Limited and others v Competition and Markets Authority [2022] CAT 11).

Disclosure can also be sought against third parties, but the applicant must satisfy the High Court or CAT that the documents sought are likely to support its case or harm another party’s case and that disclosure is necessary to dispose fairly of the claim or to save costs. Following implementation of the Damages Directive, the High Court or CAT cannot make a disclosure order addressed to a competition authority in respect of documents included in the authority’s file unless satisfied that no-one else is reasonably able to provide them.

In proceedings before the High Court, the parties must file disclosure reports, Electronic Documents Questionnaires and seek to agree a proposal for disclosure before the first case management conference (“CMC”). The court will then choose from a “menu” of disclosure options (which includes limiting disclosure to key documents, narrow search-based disclosure and wide search-based disclosure) to determine the appropriate disclosure order. Since 1 January 2019 (and due to operate until 31 December 2022), a new disclosure pilot scheme has applied to cases before the Business and Property Courts. This is intended to be an entirely new scheme of disclosure under which the parties (and their representatives) cooperate in order to assist the court in determining the scope of disclosure that is required in the most efficient way possible. However, the new scheme does not currently apply to English law-governed competition damages actions unless the court makes a specific order to that effect.

In proceedings before the CAT, the procedure is less prescriptive. The CAT will determine whether or not a disclosure report is appropriate at the first CMC and then decide what orders to make in relation to disclosure at a subsequent CMC.

The losing party is usually ordered to pay the costs of the winning party, although, in practice, the winner is unlikely to recover the full amount. The High Court or CAT will generally take into account a range of factors in determining the level of a cost award, including the conduct of the parties before and during the proceedings.

Costs which have been unreasonably incurred or which are unreasonable in amount cannot be recovered.

Litigation funding is now a common feature of competition damages actions in the UK. Although not formally regulated, litigation funders generally subscribe to the “Code of Conduct for Litigation Funders”, a voluntary code of conduct launched in November 2011.

Lawyers are permitted to act on the basis of conditional fee arrangements (“CFAs”) under which the client pays different amounts for the legal services provided depending on the outcome of the case. Success fees payable under CFAs are not recoverable from the other side.

Contingency fee agreements known as “damages-based agreements” (“DBAs”) are also permitted, except in respect of collective actions. A DBA is an agreement under which the amount paid to the lawyer is calculated by reference to the compensation recovered by the client. A successful claimant which has entered into a DBA may not recover more by way of costs than is payable under the DBA. The Court of Appeal has recently decided that the restriction on DBAs in collective actions does not prevent litigation funders being paid a share of the damages received if the proceedings are successful (Paccar v Road Haulage Association [2021] EWCA Civ 299 which, at the time of writing, is pending an appeal to the Supreme Court).

Claimants may also take out “after-the-event” or “ATE” insurance covering any liability for the other side’s costs if their claim is unsuccessful. The insurance premia are not recoverable from the other side. If no ATE coverage (or insufficient ATE coverage) is obtained, then, depending on the circumstances, third party funders can be made liable for the defendants’ costs if a claim fails.

The relatively high costs of lawyers, experts and the litigation process in the UK can be a deterrent to claimants. However, this has been mitigated to some extent by the ready availability of litigation funding.

There was initially some speculation that Brexit may make the UK a less attractive place for claimants to bring claims, particularly in light of the inability to rely on Commission decisions for post-Brexit investigations in order to found follow-on claims. On the whole, however, the changes that have been implemented post-transition period are such that bringing competition damages claims in England and Wales continues to offer many practical advantages.

For example, one major change is that the UK is currently outside of the EU framework that governs jurisdiction (see question 7 above). This means that jurisdiction is governed by the English common law rules (save for cases commenced before the end of the transition period). These common law rules are, in some respects, more generous to claimants than the rules that applied under the previous EU framework. Moreover, EU judgments should still be enforceable in the UK and vice versa (although this will be less straightforward than previously) and the EU framework on choice of law has been domesticated and continues to apply post-transition.

In any event, Brexit should have a limited impact on competition damages actions in the short term. As noted in respect of question 1 above, claimants continue to be able to bring follow-on damages claims in the UK on the basis of Commission decisions taken before the end of the transition period and to bring follow-on damages claims in the UK on the basis of Commission decisions in Continued Competence Cases. Other Commission decisions taken after the transition period will also no doubt remain persuasive authority for the UK courts. EU principles and case law applicable before the end of the transition period (i.e. Retained EU Law) will continue to bind UK courts (with the exception of the Supreme Court) when considering damages claims brought after that date.

Claimants are also able to bring claims in respect of post-Brexit breaches of EU law outside of the UK as breaches of foreign torts (which are a common feature of commercial litigation in the UK).

The UK’s collective actions regime has been transformed following the Supreme Court’s decision in the Merricks case (see question 11 above). At the time of writing, seven CPOs have been certified: six on an opt-out basis and one on an opt-in basis. The CAT has also invited the would-be representative claimants in the FX litigation to refile their claims on an opt-in basis.

In the short to medium term, the CAT will continue to have a busy workflow assessing the backlog of CPO applications following the Merricks decision. Its case load will likely be increased by the favourable approach which it (and the Court of Appeal in Le Patourel/BT) have adopted to the interests of litigation funders, in light of their roles in facilitating access to justice.

Some of the CPO applications awaiting consideration are due to test the boundaries of the collective actions regime. The claims brought on behalf of consumers against Apple, for reducing battery life and slowing iPhones, and against BT, for the way it structured its pricing, show how lawyers and funders are starting to “get creative” and advancing claims for novel forms of loss that might be more appropriately characterised as consumer protection claims than competition claims.

Similarly, following the decision of the Supreme Court in Lloyd v Google that the “representative action” regime was unsuitable where an individualised assessment of damages was required (see question 11 above), applicants for a CPO against Meta are attempting to persuade the CAT that the loss of control of personal data of Facebook users constitutes actionable loss under competition law. If this claim survives the certification and strike-out stage, it is likely to spur further growth in the number (and different types) of cases brought under the collective actions regime.

The growth of the collective actions regime is not all bad news for potential defendants, as the collective settlement regime introduced alongside it (see question 20 above) provides a potential route for achieving finality of settlement on a class-wide basis (instead of defendants having to negotiate with individual claimants or claimant groups).

As it becomes busier, the CAT’s procedure is developing and maturing. For example, as described in question 11 above, it has given itself the ability to hear common issues across different claims in “umbrella proceedings”, which we anticipate will be adopted in the interchange direct purchaser and Merricks actions, and are likely to become a common feature where parallel claims concerning different levels of the supply chain raise common liability issues and/or pass-on. Following the comments of the Court of Appeal in Le Patourel/BT, which held that the CAT Guide to Proceedings could not impose a presumption in favour of opt-in proceedings, the CAT has also taken the decision to disregard a section of the Guide which suggests how an opt-out claim should be case managed to prepare for a potential settlement (Justin Le Patourel v BT Group PLC [2022] CAT 21). In that decision, the CAT (of its own initiative) adopted an alternative approach in the interests of efficiency. Its approach to case management is likely to continue to be nimble and creative.

Looking longer term, it will be interesting to see how Commission decisions are treated by the UK courts in cases where such decisions are not binding. We anticipate that they will be treated as persuasive authority on competition law matters, although it is possible that UK and EU competition law may start to diverge, particularly in respect of more controversial CJEU decisions.