In two Decisions the European Commission found that various major banking groups had infringed article 101 of the FEU Treaty by operating cartels in relation to foreign exchange spot trading. The proposed class representatives, E and H, made competing applications under section 47B of the Competition Act 1998 for collective proceedings orders on an opt-out basis to continue collective claims for damages arising from the infringements. In deciding whether to certify collective proceedings on an opt-in or opt-out basis, the Competition Appeal Tribunal was required by rule 79(3) of the Competition Appeal Tribunal Rules 2015 to take into account (a) the strength of the claim, and (b) whether it was practicable for the proceedings to be brought as opt-in proceedings. In relation to strength of the claim, the tribunal held that the proposed class representatives had not articulated a viable case on causation and that weakness led to the conclusion that the proceedings should be opt-in. In relation to practicability, the tribunal found that if the claims were certified on an opt-in basis, there would be insufficient take up for any claim to be viable. Nonetheless, it went on to hold that an opt-in claim was practicable because, applying the overarching principle of access to justice, the class to be represented were well-resourced and sophisticated entities capable of bringing proceedings. The tribunal indicated that although H’s claim was more broadly framed than E’s and had been filed first, had it been minded to certify on an opt-out basis, it would have granted the carriage of the collective proceedings to E, whose claim was better thought through. The tribunal stayed the applications to allow the proposed class representatives to reformulate their case on the causative link between the infringement and the alleged losses, adding that it would defer making an assessment of the merits pending the submission of reformulated cases. The proposed class representatives appealed pursuant to section 49(1A) of the 1998 Act on the grounds, inter alia, that the tribunal had erred (i) in finding that it had the discretion to consider whether to make a collective proceedings order on an opt-in or opt-out basis where neither of them had sought certification on an opt-in basis, and (ii) in its approach to the strength and practicability criteria in rule 79(3) for determining whether claims should be certified as opt-in or opt-out. H also challenged the tribunal’s indication that had it been minded to certify on an opt-out basis, it would have granted carriage of the proceedings to E. Both H and E sought to rely on European Commission Decision in relation to a separate infringement which they contended supported their arguments on the causal effect of the cartel. The banks, relying on the common law rule that factual findings in civil cases were inadmissible in subsequent proceedings, disputed the Decision’s admissibility. Because of uncertainty about the scope of the appeal route under section 49(1A)(a) of the 1998 Act, which was limited to points of law arising from the tribunal’s decision as to the award of damages, the proposed class representatives also brought judicial review claims which challenged the tribunal’s judgment on the same grounds as the appeals.
On (i) the preliminary question whether the challenges to the judgment should be by way of an appeal under section 49(1A) or judicial review, and (ii) the appeals and judicial review claims—
Held, (1) there were good reasons why an appeal should take precedence over judicial review. Judges who sat in the Competition Appeal Tribunal acquired specialist skills and received specialist training and a tribunal panel routinely included an economist. If judicial review were a normal route of challenge that would entail a challenge from a three-person specialist tribunal, to a non-specialist High Court judge sitting in the Administrative Court, which could then lead to an appeal to the Court of Appeal. Furthermore, since in practical terms there was not a great deal of difference, if any, between an appeal on a point of law and judicial review, there was no benefit in permitting judicial review to have a broad scope. The statutory right of appeal in section 49(1A) of the Competition Act 1998 should therefore be construed broadly in order to minimise the scope of judicial review. Where there was any doubt about the route of challenge, it made sense for the court to sit as the Court of Appeal and High Court to avoid duplicated court time and expense. All the grounds of appeal in the present case raised points of law as to damages and were therefore within the statutory jurisdiction to appeal (paras 57–60, 64, 87, 145).
(2) Appeals allowed in part and matter remitted to the Competition Appeal Tribunal. The tribunal had jurisdiction to choose as between opt-in or opt-out even where the proposed class representative applied only for an opt-out collective proceedings order. In most cases the merits would be a neutral factor in the choice between opt-in and opt-out. However, insofar as they were not neutral, there needed to be a relevant connection with the choice to be made. The factors relevant to the choice bore on such questions as which option was better able to vindicate the claim, which afforded better access to justice and which enabled the case to be best case managed from the point of view of judicial efficiency, or by reference to some other relevant consideration. Where there would be no proceedings save on opt-out terms, that was a powerful factor in favour of a claim being certified as opt-out. Access to justice was not just about the size and sophistication of the class members, but also encompassed the size of the claim and whether it would be proportionate or practicable for the class members, whatever their size and degree of sophistication, to commence proceedings to recover that loss. The legislation was drafted in broad and unlimited terms and there was nothing to suggest that access to justice was only for consumers and small or medium-sized enterprises. In the present case the tribunal had erred in relation to both the strength and practicability factors in rule 79(3)(a) and (b) of the Competition Appeal Tribunal Rules 2015. In relation to strength, having concluded that it would form no final view on the merits pending the submission of reformulated cases by the proposed class representatives, the tribunal had been wrong to treat that necessarily provisional view as definitive and accord it decisive weight in the scales against opt-out, knowing and intending that that would bring the claim to an end. In any event, it was necessary to link any conclusion on strength to the choice the tribunal had made. In relation to practicability, the tribunal had erred in the inferences it had drawn from the data explaining why opt-in was impracticable. There were two other factors that pointed in favour of opt-out proceedings: (i) the statutory purpose of facilitating the vindication of rights of consumers arising out of a proven infringement, and (ii) the importance of the regime being applied in a manner which encouraged compliance with the law. Accordingly, the tribunal should not have declined to certify the proceedings on the basis that they were proposed on an opt-out rather than on an opt-in basis (paras 93, 123, 128, 134, 138).
(3) The discretion as to who should have carriage of the claims of class members was broad and multifaceted. Since it was unlikely to be sensible or feasible to appoint two representatives to represent the same class, the norm would be that the tribunal would choose a single representative. But in principle it was not precluded from choosing more than one representative, for example, if it was necessary in order to overcome an insoluble conflict between categories of class member. The mere fact one putative class representative crafted a broader claim was not an indication that its claim was preferable. There might be many good reasons why a better articulated and thought-through claim was narrower. There might be sensible trade-offs to be made between pursuing the more questionable outer limits of a claim, which might significantly add to costs, and focusing on a narrower and stronger core claim, which might be more efficient to litigate. So far as funding arrangements were concerned, there might be artificiality in making a snapshot evaluation of funding packages at the certification stage. It might be better for the tribunal to consider not just the snapshot of what was on offer, but in particular the ability and preparedness of each competing class representative and its funders to increase its facility over time, and the resilience of that facility, for example, whether it was guaranteed and ringfenced. That might be a better indication of which carrier was best suited in the context of efficient running of the litigation as a whole, and the important need to protect a successful defendant against costs. First to file was a largely irrelevant factor. In the circumstances, there was no basis on which to interfere with the tribunal’s decision to select E to be the class representative (paras 139, 148, 151, 153, 155).
Per curiam. (i) It has been correctly recognised on many occasions that the rule about findings in civil proceedings not being admissible in subsequent proceedings does not apply in the Competition Appeal Tribunal. However, while the tribunal does not apply the strict rule it does, of course, endeavour to secure fairness. Without intending to be exhaustive, it will examine such matters as: whether the decision is a follow-on decision and the limits of the binding effect under section 60A of the Competition Act 1998; where not a follow-on decision, the extent of the overlap between the prior findings of facts and the present case; who the earlier decision maker was and whether it was a specialist fact finder or otherwise; what the standard of proof was which was applied to the findings; and the nature of the legal analysis in the prior decision and the extent to which this affects the findings of fact made. The tribunal will also consider to what forensic use the earlier findings are sought to be deployed. There might be many relevant uses some of which fall short of reliance upon earlier conclusions about the ultimate merits. The earlier decision might for instance identify relevant evidence and thereby demonstrate lines of inquiry relevant only to disclosure. The tribunal will be conscious of the risk that being invited to perform a detailed inquiry into how prior findings came about draws it into disproportionate, satellite, litigation (paras 100–102).
(ii) The Court of Appeal has jurisdiction to make or amend a collective proceedings order. It is not correct to regard the tribunal as operating wholly independent of any of the provisions of the Senior Courts Act 1981, nor to regard section 47B(4) of the 1998 Act as entitling only the tribunal to make collective proceedings orders (paras 162, 165).
Aidan Robertson KC, Victoria Wakefield KC, Benjamin Williams KC, Jamie Carpenter KC, David Bailey and Sophie Bird (instructed by Hausfield & Co LLP) for the proposed class representative in the first application and sixteenth respondent in the second application.
Brian Kennelly KC, Paul Luckhurst, Thomas Sebastian and Hollie Higgins (instructed by Baker McKenzie LLP, Allen & Overy LLP, Herbert Smith Freehills LLP, Slaughter and May, Macfarlanes LLP, Gibson, Dunn & Crutcher UK LLP, and Latham & Watkins (London) LLP) for the first to fifteenth respondents in the first application and first to thirteenth respondents in the second application.
Daniel Jowell KC, Gerard Rothschild and Charlotte Thomas (instructed by Scott + Scott UK LLP) for the sixteenth respondent in the first application and proposed class representative in the second application.
The fourteenth and fifteenth respondents in the second application did not appear and were not represented.