I. Introduction
Having a stablished system of precedents related to damages claims at UK courts, private enforcement of competition law has been experiencing great consolidation and advancing further with respect to economic evidence. The Competition Appeal Tribunal (CAT) once competent to hear claims for damages that “follow on” from infringement decisions taken by the UK or European competition authorities had its jurisdiction amplified by The Consumer Rights Act in October 2015 to process “standalone” claims, introducing unprecedented collective proceedings.
Following findings by the European Commission on 2007 that MasterCard’s cross-border European Economic Area (EEA) Multilateral Interchange Fees (MIFs) were breaching Article 101 of the Treaty on the Functioning of the European Union (TFEU), a series of damages claims against Mastercard have seen filed into the CAT and the High Court from which we can bring special attention to Arcadia & Ors v MasterCard at the Hight Court and Sainsbury’s Supermarkets Ltd v MasterCard at the CAT, which had completely opposite outcomes.
In order to determine if the MIFs were anticompetitive and arrive at these conclusions both courts agreed that they had to consider whether the MIFs restricted competition in comparison to a scenario where the MIFs did not exist or existed in a less restrictive form. This “counterfactual” is a method commonly used as economic evidence in competition law and was precisely the reason for divergence between the two courts.
This essay examines the key aspects of competition litigation before the CAT and its economic evidence features focusing on MasterCard’s cases, revealing a gap between UK Courts approaches and exploring this compelling economic evidence role known as counterfactual with regard to objective limits of assumptions and standards of proof on civil procedure.
II. Damages claims and judicial procedure in the UK
Long before Crehan and Mandfredi the UK courts have been granting damages as a remedy for harm under Article 101 of the TFEU. These claims can be brought directly before a UK court as they are often based on both the relevant European provision and the UK’s domestic equivalent the Competition Act 1998 (CA98). There are certain differences, however, between the two options of jurisdictions available to process these claims, the High Court procedure and CAT procedure.
The Consumer Rights Act 2015 (CRA) introduced a new collective action regime to the competition law landscape in the UK, including the ability to bring opt-out actions. The defining feature of a collective action is that the Competition Appeal Tribunal (CAT) can consider a collection of individual claims together rather than considering all aspects of every individual claim separately.
The claims in the High Court are generally heard by a single judge while the claims in the CAT are generally heard by a panel. The chairman will be a lawyer, but the other two will be drawn from the CAT’s panel of ordinary members, which includes experts from other fields, such as economics, accountancy and business. Claimants may therefore regard the CAT as more commercial and less legalistic than the High Court .
Nonetheless, both standalone and follow‑on claims can be brought in either the High Court or the CAT. Most relevant competition cases would be a mix of the two. For the purposes of this discussion the Sainsbury’s v MasterCard case will be emphasized.
III. Disclosure of Evidence
In a damages legal action, the claimant has to demonstrate that the defendant is guilty of an infringement of competition law and that the breach caused quantifiable harm, establishing, therefore, causation and quantum .
After an application based on primary evidence to support the plausibility of the claim, the courts will be allowed to order disclosure of relevant evidence which will be available to all parties and authorities. UK’s disclosure procedure has a very good offering more legal certainty in this area. The availability of discovery, while likely far less expansive than under U.S. procedures, will be a major change in European jurisdictions .
The rules governing jurisdiction and applicable law in the UK may change as a result of Brexit, with the extent of the changes dependent on the arrangements entered into between the UK and other European states. Until then, the UK will remain a forum of choice for cartel damages cases lawsuits because of its favorable rules on disclosure and the long experience of its judges in applying these rules. All of this alongside the new “opt-out” collective actions regime, creates a more claimant-friendly jurisdictions, despite the consequent risks of forum shopping .
IV. Quantification of Harm
According to the Guidance to national courts on the Quantification of harm caused by infringements of the EU antitrust rules, the quantification of damages remains subject to national rules. The courts will be allowed to estimate the amount of the damage, and there will be a rebuttable presumption that the infringement of antitrust law caused the harm . Therefore, it will be under CATs attributions to determine how each class member’s damages will be calculated :
Assessment of damages
92. (1) Where the Tribunal makes an aggregate award of damages, it shall give directions for
assessment of the amount that may be claimed by individual represented persons out of that award.
(2) Directions given may include—
(a) a method or formula by which such amounts are to be quantified;
(b) provision for making an interim payment before the final amount which a represented
person may receive is determined;
(c) the appointment of an independent third party to determine a claim or dispute by any
represented person regarding the quantification of the amount which that person will
receive, and provision for payment of the costs of that independent third party; and
(d) a requirement that the apportionment of the aggregate award as between represented
persons is approved by the Tribunal.
(3) The class representative shall give notice to represented persons, in such manner as the
Tribunal directs, of any hearing to determine what directions should be given in accordance with paragraph (1), and any represented person may apply to the Tribunal to make submissions either in writing or orally at that hearing.
Distribution of award
93.—(1) Where the Tribunal makes an award of damages in opt-out collective proceedings, it
shall make an order providing for the damages to be paid on behalf of the represented persons to—
(a) the class representative; or
(b) such person other than a represented person as the Tribunal thinks fit.
(2) Where the Tribunal makes an award of damages in opt-in collective proceedings, it may
make an order as described in paragraph.
As briefly seen above, the CAT can calculate damages in several ways, collectively or individually. in the aggregate, via sub-classes, or individually. If the CAT cannot specify a method, it may appoint a third party to determine the quantification of the claims.