CAT guidance on competing Collective Proceedings Order applications

When considering claims regarding a cartel concerning medium and heavy trucks, the Competition Appeal Tribunal (CAT) provided useful guidance¹ on the approach to be taken to competing Collective Proceedings Order (CPO) applications.

The applications were brought in 2018 by the Road Haulage Association (RHA) and UK Trucks Claim (UKTC) and sought follow-on damages alleged to arise from a cartel.

Background to the applications

On 19 July 2016, the European Commission adopted a decision imposing a fine of over €2.9bn on leading truck producers MAN, Daimler, DAF, Iveco, and Volvo/Renault for participating in a cartel concerning medium and heavy trucks. The producers acknowledged their cartel involvement and agreed to settle the case. MAN received immunity for revealing the existence of the cartel and thereby avoided a fine of €1.2bn.

One further truck producer, Scania, decided not to settle and appealed a separate decision on 27 September 2017 under which it was fined €880m. By its judgment of 2 February 2022, the General Court dismissed the action brought by Scania seeking annulment of the contested decision. On 8 April 2022 it filed an appeal against the General Court’s judgment, to the European Court of Justice as the last court of instance in the EU.

A significant number of follow-on claims have been brought in the UK by major purchasers seeking damages. Seven of those actions have been case managed together and set down for a series of trials. The claims brought in the UK are among several thousand claims against the truck producers brought in various European jurisdictions.

Key differences between the applications

The applications brought by UKTC and RHA were different in several respects. UKTC, a special purpose vehicle (SPV), sought to bring collective proceedings on an opt-out basis. The RHA, a trade association, sought to bring collective proceedings on an opt-in basis. The UKTC proceedings covered trucks acquired in the UK. The RHA proceedings extended also to trucks acquired in the EEA (so long as the acquirer belonged to a group of companies that also acquired trucks in the UK). The RHA and UKTC experts approached the estimation of loss by very different methodologies.

Having concluded that both claims were in principle eligible and suitable for inclusion in collective proceedings, and that it would be wholly inappropriate to approve both the RHA and UKTC applications, the Tribunal had to determine which of the two applications was the more suitable.

The decision of the Competition Appeal Tribunal

The fact that UKTC was an SPV, the sole function of which was the pursuit of the proposed proceedings, and RHA is a well-established not-for-profit trade association, with strong connections to the road haulage industry, did not make a difference. The CAT considered this a neutral factor.

Although there is no presumption under the legislative scheme in favour of opt-in over opt-out proceedings (see also BT Group PLC v Le Patourel [2022] EWCA Civ 593), the CAT held that for the present claims, opt-in proceedings have the notable advantage of giving the expert economists access to a very significant source of data from the claimants to inform and support their quantification of estimated damages. They are not only practicable but the more reasonable and sensible way of proceeding, in the interests of justice to all the parties.

RHA’s expert proposed to use econometric estimation of price during the cartel period and after the cartel ended. Such an econometric regression analysis is well-established and often used to investigate and estimate the price effect of a cartel. The UKTC expert’s approach was very different. He proposed as his primary method to use simulation modelling. This method is not one that compares pricing in the cartel period with the post-cartel period.

The CAT felt more confidence in the robustness of the method proposed by RHA’s expert. In part because the use of regression analysis is well tested and widely acknowledged, but more significantly, because the RHA is proposing opt-in proceedings which will give their expert 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.

The CAT proceeded to grant the RHA permission to bring collective proceedings on an opt-in basis, but for a narrower class definition than originally sought. Having regard in particular to the costs and benefit involved and the need for a fair and efficient resolution of the common issues, the CAT did not find it suitable to include claims for non-UK trucks within the class.

There are a limited number of UK businesses which acquired trucks abroad, or indeed belong to “groups” of companies which acquired trucks abroad, the CAT said. Those will be large businesses, well able to bring individual actions, and do not need to do so in the UK. There are numerous truck damages claims in other European jurisdictions and such claimants have the option of suing the producers elsewhere.

^1. UK Trucks Claim Limited v Stellantis NV and others, and between Road Haulage Association Limited v Man Se and others [2022] CAT 25 (8 June 2022).