by Alexandre Predal, under the supervision of Maria José Azar-Baud
On 8 June 2022, 14 months after the claims were heard, the Competition Appeal Tribunal decided to grant a Collective Proceedings Order (CPO) to the Road Haulage Association. The association represents 17,500 haulage companies that were allegedly harmed by truck manufacturers over a 14-year long cartel as found in 2016 by the European Commission.
In selecting the opt-in claim brought by the RHA, the CAT simultaneously ruled to deny certification to UK Trucks Claim Ltd, a competing representative which aimed at representing hauliers on an opt-out basis: class members needed not to opt in to the class but instead were included by default and would have needed to manifest their desire to go. Although theoretically and legally, both claims could have been concurrently certified, the CAT opted for consistency by (i) ruling the claims were best brought on an opt-in basis and (ii) anointing the action brought by the RHA only.
i) The choice for opt-in
As in the FX CPO (see here for a previous analysis), which also had to rule on the very question of whether a claim was best brought on an opt-in or an opt-out basis, the CAT found that the existence of separate individual proceedings already commenced by individual claimants hinted towards opt-in. Indeed, had opt-out been chosen, and to avoid connexity, the UKTC class definition would have had to expressly exclude these claims.
Opt-in also allowed for the distribution of individual award of damages. This means that damages could be individualised for each claimant, therefore making sure they would not receive too much more or less than what they ought: this fit better with the so-called ‘compensatory principle’. For instance, pass-on or compound interests would be much more accurately assessed in such instance. As for UKTC, opt-out proceedings warranted an aggregate award of damages: damages would be due to the class as a whole first, to then be divided per claimant.
Eventually, the CAT ruled there is no statutory preference for opt-in and decided not to rule on principle as to whether it is theoretically possible to certify two competing collective proceedings. The CAT also ruled that the claim brought by UKTC could have been certified, a situation which differs from the FX CPO. Despite these findings, already made in the FX CPO, the CAT rules that it is more cost-efficient to elect only one claim for certification, and chooses the claims brought by the RHA.
ii) The RHA claim
First, the CAT ruled that both representatives were suitable for the purposes of these claims, which is a statutory prerequisite for certification. But, unlike in the FX Collective Proceedings Order, the CAT sent praises towards both representatives: the RHA is a reputable and well-established association in the UK whilst the Board of Experts set up by UKTC convinced the CAT that the litigation would be led having the best interests of the victims at heart.
Interestingly enough, the litigation strategy used by the RHA had various virtuous side-effects:
- The CAT deemed that the economic expert reports submitted by the RHA were more robust:
- Since their class was finite, the expert economists had a better idea of which interests to represent, and therefore could build more robust counterfactual scenario,
- Access to data was much wider, thereby ascertaining the empirical analyses conducted by the experts instructed by the RHA,
- It effectively neutralised the need for hundreds, or perhaps thousands of individual lawsuits, which involves less case management and therefore better access to justice. The benefits of opt-in collective proceedings outweigh those of individual lawsuits.
Yet, the CAT noted that litigation funders would prefer opt-out proceedings, as there are more likely to be unrecovered monies in the pot of damages, therefore more gains to be made for funders. Helpfully, the CAT acknowledges that “collective proceedings would be impossible without third-party funding” , which gives food for thought when EU Member States are required to transpose the Representative Actions Directive.
For all these reasons, and provided the RHA agrees to marginally amend the definition of the class it intends to represent, the CAT granted certification to the claim brought by the RHA. On 28 October 2022, the CAT granted permission to appeal to:
- UKTC, which contends that the claims brought by first-hand and second-hand purchasers should have been divided as they is a conflict of interests due to pass-on considerations,
- The manufacturers, which argue that the claims are not suitable to be brought on a collective basis, even if this is opt-in.
It should also be noted that pending these potential appeal proceedings, the Supreme Court granted the Defendants permission to appeal a 2021 decision by the Court of Appeal, which confirmed a 2019 CAT decision relating to the funding arrangements of both actions. Both the CAT and the Court of Appeal validated funding structures, whilst setting out useful case law principles in considering the criteria upon which funding arrangements should be considered appropriate in a class action context. Should the funding arrangements be invalidated, this could remove the necessary financial fuel for both litigation vehicles, which would leave truck owners’ claims in tatters.