​New class action rules get first test before UK tribunal

31 January 2017 9:57am

12 December 2016. By Lewis Crofts.

Can UK class action rules adopted last year be used to sue a company that manipulated online scooter prices in 2010? That question came before a London tribunal today, as judges explored rules that allow victims of anticompetitive conduct to group together and sue for damages.

Today, the tribunal heard from lawyers for Pride Mobility Products, as the company sought to fend off a lawsuit brought on behalf of pensioners.

At the outset, Michael Armitage, for Pride, sought to undermine the pensioners’ claim, saying that it relied on laws that weren’t in force at the time of the infringement. He said it would be “deeply unfair” for the lawsuit to proceed because it had a “substantive impact” on his client.

But a barrister for the group of pensioners said the British parliament had intended the laws to be used exactly for such cases, dismissing Pride’s “solipsistic” argument.

The hearing — in which Dorothy Gibson, the general secretary of the National Pensioners Convention, aims to be “certified” as the class representative — is the first of its kind and will indicate how the tribunal views “collective actions,” as group litigation is known in the UK.

It will also set the tone for the second proposed class action in the UK: consumers seeking up to 14 billion pounds in damages from MasterCard. Walter Merricks, the class representative in that case, was watching today’s proceedings.

In 2014, the UK antitrust authority found Pride had engaged in illegal pricing arrangements with retailers. The manufacturer had prevented retailers from advertising its products online at lower prices than Pride had recommended, the authority found. Gibson filed a lawsuit to the Competition Appeal Tribunal in May.

Before the tribunal, Armitage accepted the 2015 law that ushered in collective actions had “retrospective effect” on Pride. But it didn’t just create new procedures for this kind of lawsuit, he said — it “revived liability” for the company.

His argument presumes that Pride will have to pay out — in aggregate — far higher damages than it would have before the class action laws came into effect.

“There is no chance that Pride would have had this liability [without] the changes [to the law],” Armitage said, arguing it broke principles of EU and human rights laws.

Pride was prosecuted for manipulating scooter prices between February 2010 and February 2012, Armitage said. But it wasn’t until April 2012 that the government published consultation papers that pointed towards a possible regime for class actions.

Peter Roth, the presiding judge, voiced doubts over whether this was “unfair” to Price, stating that there may have been no new “liability” for the company. Rather, there was a new “practicality” for bringing claims, he said.

Armitage argued that the case encroached on EU law — and the fundamental rights enshrined in it — and this was another reason to rule that the UK claim couldn’t proceed against Pride.

Roth said Gibson’s lawsuit rested only on an infringement of UK competition law, and the regime for collective actions didn’t “implement EU law.”

Thomas de la Mare, for Gibson, dismissed Armitage’s argument, saying Pride thought unfairness was “having to pay compensation for something you thought you’d get away with.”

He said that since the passage of the legislation it was obvious that Pride could have seen collective actions coming. “What should be an attack upon the legislation is being disguised as an attack upon a discretionary power by tribunal,” he said.

Small guy

This morning, de la Mare opened the hearing by saying the new rules were designed to help the “small guy” gain redress from anticompetitive conduct.

The lawyer said the case was novel because it was the first to seek compensation for an online pricing agreement, as opposed to cartel damages, which are the usual territory of such litigation.

He admitted that the nature of Internet pricing and pensioners’ purchasing habits could mean it would be tricky to rule on damages being distributed among the class of pensioners. But, he said: “Rough justice between the claimants is better than no justice to all.”

The litigation continues tomorrow with arguments over Gibson’s “suitability” to represent the class of pensioners.

The case number is 1257/7/7/16.

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