United Kingdom Private Enforcement 1

UNITED KINGDOM: PRIVATE ENFORCEMENT

United Kingdom: Private Enforcement

1

Lesley Farrell and Sarah Ince
SJ Berwin LLP

Although the House of Lords ruled more than 20 years ago in Garden Cottage Foods v Milk Marketing Board2 that third parties are
able to sue for damages for breach of articles 81 and 82 of the EC
Treaty,3 enforcement of the competition rules in the UK has until
relatively recently been primarily achieved through public enforcement. The introduction of the Modernisation Regulation,4 however,
which decentralised the enforcement of articles 81 and 82 by giving power to both national competition authorities and national
courts to apply articles 81 and 82 directly and in full, reflected the
recognition on the part of the European Commission (the Commission) that a more effective system of competition enforcement could
be achieved by enlisting greater assistance from national competition authorities and national courts. Increasingly, the role of private
enforcement of the competition rules as a necessary complement to
public enforcement is being recognised as an essential aspect of the
competition law regime in the EU.5
In the UK, there have been a number of changes to the competition regime that have been designed to facilitate private enforcement of the competition rules. These changes undoubtedly bolster

the position of claimants and put in place “most of the main structural and legal elements for effective private actions in competition
law”.6 Indeed, when considered in the context of recent judgments
of the English courts, such as Provimi,7 English rules of disclosure
(which are more extensive than in other European jurisdictions), the
breadth of experience of the English courts in assessing damages in
complex commercial disputes and the speed with which a case can
be brought to trial,8 the UK is an attractive place in which to litigate
antitrust disputes.
Despite these changes, there has not as yet been the flood of private antitrust litigation predicted by some, albeit that there has been
a steady increase in the number of such cases,9 in particular, in circumstances where there is an existing Office of Fair Trading (OFT)
or Commission decision. We consider the most important features of
the present regime in the UK together with some proposals for future
change. We also review the most recent case law.

•

•

•

The Competition Act 1998
The Competition Act 1998 introduced two new competition prohibitions into the UK regime, which mirror articles 81 and 82 of
the EC Treaty, namely a prohibition against anti-competitive agreements (the Chapter I prohibition) and a prohibition against an abuse
of a dominant position (the Chapter II prohibition). Both prohibitions require there to be an effect on trade within the UK (or any
part of it).

The Enterprise Act 2002
The Enterprise Act 2002 (the Act) amended the Competition Act
1998 substantially. The principal changes designed to facilitate private antitrust actions are as follows:
• The Act created the Competition Appeal Tribunal (CAT).10 The
CAT is a specialist judicial body that can hear, inter alia, actions
for damages and other monetary claims under the Competition
Act 1998. Cases are heard before a panel consisting of three
members: either the president11 or a member of the panel of

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•

chairmen (who include judges of the Chancery Division of the

High Court12 and other senior lawyers) and two lay members
(who are drawn from a panel of economists, accountants and
other competition policy experts).
The Act created a right of third parties to bring claims for damages
and other monetary claims before the CAT for loss or damage
suffered as a result of an infringement of either UK or EC competition law.13 Claims may only be brought before the CAT when the
OFT or Commission has made a decision establishing that one
of the relevant prohibitions14 has been infringed and any appeal
from such decision has been finally determined. Where there is no
prior decision of the OFT or Commission, claims must be brought
in the civil courts.
In determining a claim for damages, the CAT is bound by the
OFT or Commission decision that established the infringement
and thus, in theory at least, the issue of liability should be settled
and the sole issues that remain for the CAT will be causation and
quantum.15 These claims are consequently referred to as ‘follow-on actions’ since liability arises from the prior infringement
decision. Three follow-on actions have to date been brought
before the CAT.16
The Act provides that in damages claims and other monetary
claims before the UK courts, the courts are bound by findings

of infringement by the OFT and the CAT provided that the time
for an appeal against a decision has elapsed, or, where an appeal
has been filed, it has been determined.17 They are also bound by
any finding of fact made by the OFT during the investigation of
the infringement.18 This mirrors the position that applies in cases
where there has been a prior decision of the Commission.19 In
this regard, therefore, claimants before the CAT and the courts
are in a similar position in cases where there has been a prior
infringement decision of either the OFT or Commission.
The right to bring a claim for damages before the CAT does not
affect the right to bring other proceedings in relation to that
claim.20 Thus, the choice of whether or not to pursue a claim for
damages in the CAT or the civil courts rests with the claimant.
However, proceedings for damages may be transferred between
the CAT and the High Court21 on the initiative of the High
Court as well as on an application by the parties.22, 23
The Act created a right of specified bodies to bring an action
for damages or other monetary claims before the CAT on
behalf of consumers where they have suffered loss or damage
as a result of an infringement of either UK or EC competition

law.24 At present, the Consumers’ Association is the only specified consumer body. It has to date brought one damages action
under this new provision against sports retailer JJB, which arose
from the OFT decision that JJB and a number of other retailers
breached the Chapter I prohibition by fixing the prices of replica
England and Manchester United football kits. The case is currently adjourned pending settlement discussions.

Recent developments and possible future developments
Notwithstanding these changes, concern has been expressed by both
the Commission and the OFT that more could be done to facilitate

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private damages actions. In this regard, the OFT has recently published a discussion paper25 in which it puts forward proposals to
improve the existing system. This builds on some of the ideas contained in the Commission’s 2005 Green Paper,26 which identified
obstacles to a more efficient system of damages claims and suggested
how these could be overcome.27 Although the OFT’s stated objective
is to promote a compliance culture through private enforcement, it
is also concerned to ensure that such a culture does not give rise to a

‘litigation culture’ that may be harmful to legitimate business activity
or compromise public enforcement.28
The OFT paper focuses on the following issues:
• how the available means of privately funding civil actions and
insuring against unfavourable outcomes could be improved and
widened;
• evidential issues, including the difficulties faced by claimants in
obtaining information to enable them to bring private actions,
the status of decisions of other EU national competition authorities before the UK courts, the burden of proof in respect of the
‘passing on’ defence and where it should lie, and the law applicable to claims involving cross-border issues;
• whether and how representative actions should play a part in an
enhanced competition law system;
• how mechanisms to facilitate claims resolution in competition
cases could be improved; and
• how courts considering private competition law actions take
into account the evolution of competition policy, including the
decisions of, and guidelines produced by, the OFT.
Some of these issues have been considered by the CAT and English courts in the cases which have come before them. These,
together with a number of other issues that have arisen, are
considered below.

Jurisdiction
Many antitrust cases will concern multiple claimants and defendants
domiciled in different member states engaged in cross-border trade,
which will inevitably have effects in a number of member states.
The jurisdiction of courts to hear cases brought against defendants
domiciled in member states is governed by Regulation 44/2001.29
Defendants can either be sued in the courts of the state where they
are domiciled or, at the choice of the claimant, in the courts of the
state where the harmful event occurred.30 The place where the
harmful event occurred can be either the place where the event
giving rise to the damage occurred or the place where the damage
itself occurred (at the choice of the claimant). Under article 6(1)
of Regulation 44/2001, where a person domiciled in a member
state is one of a number of co-defendants, that person may be sued
where any one of them is domiciled provided that the claims are
closely connected.31
Under Regulation 44/2001, a claimant therefore has a wide variety of jurisdictions from which to choose when deciding where to
commence an action.
The extent of the English courts’ jurisdiction was considered in

Provimi,32 which arose from the Commission’s vitamins cartel decision.33 The Commission’s vitamins cartel decision was addressed,
among others, to Hoffman La Roche (Roche) and Aventis SA
(formerly Rhone-Poulenc) (Aventis). In a preliminary hearing of a
strike-out application, the court was asked to consider whether a
claim by a German domiciled purchaser against a German domiciled
subsidiary of one of the cartelists could be heard in England. The
claimant argued that it was able to bring a claim against the English
subsidiary of that cartelist on the basis that the English subsidiary
had, perhaps unknowingly, implemented the cartel price. Had the
English subsidiary not implemented the cartel price, the German
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domiciled purchaser would have been able to purchase from it at
non-cartel levels. If the German domiciled purchaser was able to
establish a claim against the English subsidiary, it would be able to
join other parties to the claim on the basis of article 6(1) of Regulation 44/2001. The court accepted that the claim was arguable and
therefore refused to strike out the proceedings. In particular, the
court noted the flexible and expansive notion of ‘undertaking’ recognised in EU competition law, which encompasses separate legal
entities provided they form a single economic unit. On this analysis,
subsidiaries within the same corporate group formed one economic

unit and were to be treated as one for the purpose of a breach of
competition law.
Another issue that arose in Provimi was that some of the vitamins were purchased under contracts containing jurisdiction clauses,
providing that disputes should be dealt with before the courts of
Switzerland, Germany or France. Under Regulation 44/200134 and
the Lugano Convention,35 an agreement between the parties choosing the jurisdiction of a particular member state gives exclusive
jurisdiction to the courts of that member state in the event of a dispute arising under the contract. However, having considered expert
evidence from each of these jurisdictions, the judge found that the
jurisdictional clauses in the purchase agreements were insufficiently
wide to include these claims based as they are on tort.36 The English
courts were therefore able to assert jurisdiction over these claims.
The extent to which jurisdiction clauses can be drafted to assist or
resist the jurisdiction of the English courts in relation to claims arising from antitrust violations remains to be seen.37
The ruling in the Provimi case enables a wide range of purchasers of products and services who have suffered loss as a result of
anti-competitive conduct to seek redress in the UK courts.38 However, there are limits on the jurisdiction of the English courts. In
the recent SanDisk39 case, SanDisk, a US importer and seller of
unlicensed MP3 players in the EU, brought proceedings in the High
Court against a number of non-UK domiciled defendants alleging
that the terms of the defendants’ licences, together with conduct
such as alleged harassment through the enforcement of certain patents, amounted to an abuse of a dominant position in the market for

the licensing of patents essential to the production, sale and importation of MP3 players and memory cards. The court, however, refused
to accept jurisdiction in circumstances where none of the defendants
were UK companies, none of the alleged acts of harassment nor
negotiations for licences had taken place in the UK, and no immediate damage had been caused to the claimant in the UK as a result of
these alleged abuses. In those circumstances, the court considered
that courts in other EU jurisdictions (where there had been border
detentions as a result of legal and administrative actions) were better
placed to hear the claim.

Limitation issues
Follow-on actions before the CAT must be brought within two years
of the relevant date.40 The relevant date is the later of either the date
on which the period to appeal to the European Court lapses, or if
an appeal has been instituted, the date on which it is determined.41
The CAT may give permission for a claim to be brought before the
relevant date after hearing from any proposed defendant.
The issue of when time starts to run against a defendant who
has not appealed an infringement decision of the Commission to
the European Court, in circumstances where the other addressees
of the decision have appealed that decision, is currently under consideration by the CAT in the Emerson case.42 Emerson is a claim

by five direct purchasers of electrical and mechanical carbon and
graphite products following on from the Commission’s decision
that the defendants, together with a number of other undertakings,
had breached article 81(1) by participating in an EEA-wide price-

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fixing and market-sharing cartel in respect of the sale of electrical and mechanical carbon and graphite products (the decision).43
One of the three defendants, Morgan Crucible has not appealed the
decision to the Court of First Instance (because it applied for and
received 100 per cent leniency from the Commission), whereas other
companies have lodged an appeal of the Decision in the Court of
First Instance. It is possible therefore that the CAT limitation period
would start to run against Morgan Crucible from the date of the
decision and against the other defendants from the date on which
their appeal is determined. If that is correct, it is equally possible
that the CAT limitation period may expire in relation to Morgan
Crucible when it has not yet even begun to run as against the other
defendants. Faced with this prospect, the claimants filed an action
for damages against Morgan Crucible before the CAT and also
sought permission from the CAT to bring the action against two of
the defendants (Schunk and SGL), who have lodged appeals, before
the expiry of the normal time limits.
The claimants argue that it would be an inefficient use of the
CAT’s time and resources and contrary to the interests of justice if
they were to proceed with their claims against Morgan Crucible
alone, without the participation of the other major addressees of
the cartel decision.44 To do so would also in their view run the risk
of irreconcilable findings of fact and judgments. This issue is yet to
be determined.45
Before the UK courts, damages actions for breach of the competition rules (ie, the cause of action is the tort of breach of statutory
duty) must be brought within six years from the date on which the
cause of action accrued.46 If a tort is continuing in nature, then a
fresh cause of action will accrue from day to day for as long as the
tort continues to be committed.47 Where an action is based upon the
fraud of the defendant or any fact relevant to the claimant’s right
of action has been deliberately concealed from him by the defendant, the limitation period will not commence until the claimant has
discovered the fraud, concealment or mistake (as the case may be)
or could with reasonable diligence have discovered it.48

Costs
One obstacle to greater private enforcement is the cost of such
actions, including the risk of being required to pay the other party’s costs in the event that a claim is unsuccessful. Costs in the UK
courts, for example, usually ‘follow the event’. This means that the
successful party will usually recover costs from the losing party.
In its recent paper, the OFT identifies the primary ways in which
a claimant lacking the resources or willingness to bear all the risk
himself may fund litigation, namely through conditional ‘no win, no
fee’ arrangements,49 after the event insurance50 or loans and suggests
improving all three options. In particular, the OFT considers:
• whether, in relation to conditional fee arrangements, a percentage increase of more than 100 per cent should be allowed and
in particular whether the percentage increase up to 100 per
cent should be recoverable from the losing party and any further increase should be met by the claimant from the damages
recovered;
• a more flexible operation of the ‘costs follow the event’ rule to
encourage well-founded claims being brought; and
• the need for the current criteria and procedure for cost-capping
orders which allow the court to cap the parties’ liability for each
other’s costs,51 to be codified.
In the CAT, as distinct from the civil courts, there is no specific rule
that costs should follow the event. In determining how much a party
is required to pay, the CAT must take account of the conduct of all
parties in relation to the proceedings.52 The CAT has shown itself
to take a flexible approach in relation to the issue of costs and the

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appropriate level of costs orders and what fairness requires in the
circumstances of the case.53
In the light of concerns regarding costs, it is interesting to note
the approach taken by the CAT in BCL Old Co & Others v Aventis
& Others on the issue of security for costs. In that case, the defendant to the claim for damages sought security for costs from the claimant. The purpose of such an application is to protect a defendant in
relation to any potential costs order it may be awarded (generally
in circumstances where it successfully defends a claim), in specific
circumstances, for example, where there is reason to believe that a
claimant will be unable to pay the defendant’s costs if ordered to
do so. Although the CAT accepted that there was reason to believe
that the claimants would be unable to pay any costs order made,
it noted that a prerequisite for an order for security for costs was
that it had to be just in all the circumstances of the case. The CAT
concluded that it would not be just to make such an order where
the claimants had a good claim, primarily because liability had been
prima facie established as a result of the Commission’s infamous
vitamins cartel infringement decision, the only issue being whether
or not the passing on defence raised by the defendants would be
accepted by the CAT.

‘Passing on’ defence and indirect purchaser standing
One issue that remains to be determined in the UK and, indeed, at
EU level, is the applicability of the passing-on defence in antitrust
cases, since to date there has been no UK or EU judgment in the
antitrust context on this issue.54
In the UK, the issue was raised before the CAT in BCL Old
Co & Others v Aventis SA & Others, where it was referred to as a
‘novel and important issue’, but the case settled prior to the substantive hearing and therefore the CAT did not rule on it. The passing
on defence raises the extent to which it is possible for a defendant to
resist a claim for damages suffered as a result of its anti-competitive
conduct on the basis that the claimant has ‘passed on’ to its own
customers any overcharge imposed by the defendant. The defendant
would argue that in such circumstances the claimant cannot have
suffered loss since it has recouped the overcharge from its own customers. Arguably, the primary justification for the recognition of the
passing on defence is to prevent what would otherwise be regarded
as the unjust enrichment of the claimant.55
Connected with the issue of the passing on defence is whether
indirect purchasers to whom an overcharge may or may not have
been passed should have standing to bring a claim. The OFT in its
recent discussion paper expressed the following views:
• it is likely to be inappropriate in policy terms to deny consumers
and other end-users the right to sue for damages where they are
often the ones suffering the effects of infringements;
• EC law may require that all persons harmed by an infringement
of articles 81 and 82 should be able to recover their loss provided that the other requirements to obtain compensation are
met;56 and
• limitations on claims by indirect purchasers may have the unintended consequence of discouraging private actions.
However, to ensure that ‘passing on’ does not become a shield for
defendants to escape liability, the OFT suggests that the burden of
proof of passing on should always lie with the defendant.
In the US, defendants are not able to raise passing on as a
defence because it is considered too complicated to calculate the
passing on of the overcharge along the supply chain.57 As a corollary of this decision, claims by indirect purchasers are generally not
allowed in the US.58

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Collective actions
As explained above, specified bodies now have the right to bring
representative actions on behalf of consumers where there is already
a finding of infringement by the OFT or Commission (ie, follow-on
actions). This is an important step forward for private enforcement
because otherwise it would be unlikely for practical reasons, if not
impossible, for consumers and purchasers with small claims to bring
an action for damages for breach of the competition rules.59
The OFT has suggested that it might be appropriate to broaden
the availability of representative actions. In particular, it suggests
allowing designated bodies to bring stand-alone representative
actions on behalf of consumers and also giving representative bodies
the power to bring follow-on and stand-alone representative actions
on behalf of businesses.

Damages
There are a number of issues that remain to be decided in relation
to damages in antitrust cases. These include the basis upon which
damages should be calculated, whether exemplary damages are
available, the period in relation to which damages can be awarded
and the circumstances in which defendants are entitled to interim
payments. Clarity on such issues may make private enforcement
more attractive by assisting claimants in predicting what they might
recover in a claim for damages. The current position in relation to
these issues is described below.
A claim for damages for breach of competition law is a claim
in tort for breach of statutory duty and the object of an award of
damages is to compensate for the damage, loss or injury suffered.
However, compensation for loss will not always provide a sufficient
incentive for would-be claimants to bring damages actions before the
courts. The Commission’s Green Paper raises the issue of whether
there are other methods of approaching damages that may be appropriate, eg, damages assessed on the basis of recovery of illegal gain
made by the infringer as a result of the infringement.60 The OFT, in
its recent discussion paper, questions whether restitutionary damages,
which aim to strip away some or all of the gains made by a defendant
which arise from a civil wrong, exemplary damages (see below) and
the equitable remedy of accounting for profits may need to be considered in some cases.61 Indeed, in BCL Old Co Limited and Others v
Aventis SA and Others, the CAT stated that it would need to consider
whether the claims before it should be assessed on the basis of the
question: ‘What has been lost [due to the breach]?’ or ‘What has been
unjustly gained by the defendant?’, and suggested that section 47A of
the Competition Act 1998 (which creates the right of third parties to
bring follow-on actions) may cover both possibilities.62
Another issue that remains to be resolved as a matter of English
law is whether exemplary damages are available for breach of competition law. As a matter of general principle, one instance in which
exemplary damages may be awarded is where “the defendant’s conduct has been calculated by him to make a profit for himself which
may well exceed the compensation payable to the Plaintiff”.63 On
this basis, there are good arguments to support claims for exemplary
damages for antitrust infringements.64 It is notable that to date all
of the damages claims filed before the CAT have requested relief by
way of exemplary damages.
In the context of a follow-on action,65 the CAT considered
whether the period for which damages could be awarded should be
determined solely by reference to the dates specified in the prior OFT
infringement decision. The CAT concluded that on the true construction of section 47A of the Competition Act 1998, the claimant
could bring a claim for a period of loss greater than that found in the
original infringement decision since the defendant had not ceased its
infringing conduct immediately at the date of the OFT’s decision and
neither the OFT nor CAT had made any such finding of fact.
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Under the CAT rules, the CAT can require a defendant to make
an interim payment on account of any damages (except costs) which
the CAT may hold the defendant liable to pay. In order to do so, the
defendant against whom the order is sought must have admitted his
liability to pay damages to the claimant or the CAT must be satisfied
that ‘if the claim were to be heard the claimant would obtain judgment for a substantial amount of money (other than costs) against
the defendant from whom he is seeking damages’.66 Any payment
that the CAT orders must be limited to a reasonable amount of the
likely final damages award.67
The first award of interim damages in the CAT was made in the
Healthcare at Home Limited v Genzyme case.68 This was a follow-on
action arising from the decision of the director general of fair trading
that Genzyme had abused its dominant position by engaging in margin squeeze tactics.69 The CAT awarded £2 million by way of interim
relief to Healthcare at Home in respect of loss of revenue.70

***
Predictions of a rapid expansion in private antitrust litigation in
the UK following the coming into force of the Act have not been
borne out, possibly reflecting the degree of uncertainty surrounding a number of important procedural and substantive issues arising
in antitrust litigation in the UK, as described above. However, the
number of damages claims coming through the CAT and UK courts
has shown a marked increase and there also appears to be an increase
in the number of cases that are being settled out of court. Slowly,
therefore, a culture of private enforcement in the UK appears to be
developing, albeit more slowly than anticipated, and this is likely to
be reinforced if further legislative changes are introduced by the OFT
or Commission following their respective consultations. Certainly, the
ability of third parties to bring follow-on damages actions in the UK
is a significant step forward in encouraging private antitrust litigation.
However, if private enforcement is to act as an effective complement
to public enforcement, greater focus is now needed on the means by
which stand-alone actions, where there is no prior infringement decision of the Commission or OFT, can be encouraged.

Notes
1

It should be noted that although similar legal principles apply
throughout the UK, different procedural rules may apply depending
on whether proceedings are brought before the courts in England and
Wales, Scotland or Northern Ireland. For the purpose of this article,
the focus is primarily on the position in the English courts.

2
3

(1984) 1 AC 130, (1983) 3 CMLR 43.
A general EC right to damages for loss occasioned by a breach of
article 81 on establishment of a causal relationship between the
infringement and the harm suffered was established by the European
Court of Justice in Courage Ltd v Bernard Crehan (Case C-453/99
[2001] ECR I-6297).

4
5

Regulation 1/2003.
See Neelie Kroes’ speech SPEECH/07/128 ‘Reinforcing the fight
against cartels and developing private antitrust damage actions:
two tools for a more competitive Europe’, Commission/IBA Joint
Conference of EC Competition Policy, Brussels, 8 March 2007 at
p4: “An increased level of private actions will also have the effect
of increasing deterrence, complementing public enforcement”. Also,
see Philip Collins, chairman of the OFT, Law Society European Group
speech 2006 at page 15: “We regard private enforcement as an
essential complement to public enforcement. At the OFT we strongly
support the development of private enforcement – both follow-on and
direct actions.”

6

Paragraph 1.2, OFT Discussion Paper 916 ‘Private actions in
competition law: effective redress for consumers and business’, April
2007.

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7
8

[2003] EWHC 961 (Comm).

the CAT, or whether the CAT has previously ruled on a similar claim

There were the factors that led to the claimants in Provimi Ltd v Roche

or, whether the CAT has developed considerable expertise by dealing

Products and Others ([2003] EWHC 961 (Comm)) choosing the UK as

with a significant number of cases arising from the same or similar

their preferred jurisdiction.See Competition Law Insight of September

infringements (see section 8.4 of the Practice Directions to the Civil

2003, ‘Jurisdiction over civil claims’, at p28.

9

However, it should be noted that many cases are settled before a

Procedure Rules Part 30).

24 Section 47B of the Competition Act 1998, inserted by section 19 of

substantive hearing. Cases that have settled before the Competition
Appeal Tribunal include BCL Old Co and Others v Aventis SA and

the Act.

25 OFT Discussion Paper 916 ‘Private actions in competition law:

Others and Healthcare at Home v Genzyme. In the High Court, a claim

effective redress for consumers and business’, April 2007.

by Kelloggs as a consequence of the participation of one of Holmen’s

26 COM(2005) 672 final, Brussels 19.12.2005. The Commission’s

subsidiaries in the carton board cartel was settled. Also, four out

anticipated follow on White Paper is expected to be published around

of seven defendants have settled damages actions brought by the
Department of Health against a number of pharmaceutical companies

the turn of the year.

27 Such obstacles were set out in Ashurst’s Comparative Report Study on

for alleged cartel activity, although claims by the Scottish ministers

the conditions of claims for damages in the case of infringement of EC

and the Northern Irish Health Board in relation to the same conduct

competition rules dated 31 August 2004. This study concluded that

are continuing.

10 Section 12 and Schedule 2 to the Act.
11 Until 5 February 2007, this post was held by Sir Christopher

this area of the law presents a picture of ‘total underdevelopment’.

28 Paragraph 1.3, OFT Discussion Paper 916 ‘Private actions in
competition law: effective redress for consumers and business’, April

Bellamy. Since his retirement, the position has been vacant pending
the appointment of a successor by the Judicial Appointments

2007.

29 Council Regulation (EC) No. 44/2001 of 22 December 2000 on

Commission.

jurisdiction and the recognition and enforcement of judgments in civil

12 Chancery Division judges are therefore likely to build up a significant
expertise and experience of competition-related litigation.

and commercial matters.

30 The rules of jurisdiction are founded on the principle that jurisdiction

13 Section 47A of the Competition Act 1998, inserted by section 18 of

is generally based on the defendant’s domicile (see recital 11 of
Regulation 44/2001).

the Act.

14 The relevant prohibitions are: Chapter I and Chapter II of the

31 Article 6 Regulation 44/2001 requires the claims to be so closely

Competition Act 1998; articles 81(1) and 82 of the EC Treaty; and

connected that it is expedient to hear and determine them together

articles 65(1) and 66(7) of the ECSC Treaty.

to avoid the risk of irreconcilable judgments resulting from separate

15 Section 47A(9) of the Competition Act 1998.
16 BCL Old Co Limited & Others v Aventis SA and Others (settled);
Healthcare At Home Limited v Genzyme Limited (settled); Emerson
Electric Co and Others v Morgan Crucible Company & Others
(ongoing).

17 Section 58A of the Competition Act 1998.
18 Section 58 of the Competition Act 1998.
19 See Commission Notice on the Cooperation between the Commission

proceedings.

32
33
34
35
36

Provimi Ltd v Roche Products and Others [2003] EWHC 961 (Comm).
Case COMP/E-1/37.512
Article 23(1).
Article 17.
The French jurisdiction clauses provided, for example, either: “Any
dispute relating to the fulfilment or interpretation of our sales
agreements will fall within the competence: for sales in France:

and the Courts of the EC Member States in the application of articles

exclusively of the ‘Tribunal de Commerce de Nanterre, for export

81 and 82 EC (2004/C 101/04).

sales: exclusively of the ‘Tribunal de Paris’, even if the commercial

See also Iberian UK Ltd v BPB Industries and British Gypsum

documents of our customers include stipulations to the contrary […]”

(1996) 2 CMLR 601, in which it was held that it would be an abuse

or “Law and jurisdiction - The commercial court having jurisdiction

of process to allow the defendants to challenge the Commission’s

over the locality in which our registered head office is situated shall

findings in national court proceedings, thus making clear that

have exclusive jurisdiction over all and any disputes arising herefrom,

decisions of the Commission are admissible in English court

whatever stipulations to the contrary may be contained in our

proceedings as evidence of the correctness of their conclusions.
However, also note the House of Lords decision in Courage

v Bernard Crehan [2004] EWCA Civ 637 CA in which it was found
that there is no obligation to treat the factual or economic analysis
in ‘parallel’ decisions that concern the same economic market as
established facts. This means that third parties who are considering
bringing an action for damages caused by anyone but the party to
whom an existing Commission decision is addressed, cannot rely on
the economic and factual conclusions in such decisions in order to
bind the English courts. This judgment severely curtails the already
limited assistance provided to claimants by parallel decisions, at least
as regards the English courts.

20 Section 47A(10) of the Competition Act 1998.
21 Section 16 of the Act.
22 This applies only to proceedings in which damages for breach of
articles 81 and 82 of the EC Treaty or Chapter I and II Competition Act
1998 are claimed, in circumstances where an infringement decision
has been made by either the OFT, the Commission or the CAT (in
relation to an appeal of an OFT decision).

23 In considering whether to make an order for transfer, the High Court
shall take into account whether a similar claim is being dealt with by

230

customer’s commercial documents”.

37 It seems likely that in future, jurisdiction clauses will be drafted to
include claims based on tort.In some instances, this may be done to
preclude English courts asserting jurisdiction.

38 Also see F Hoffman-La Roche Limited v Empagran SA [2004] 5 US 1.
39 SanDisk Corpn v Koninklijke Philips Electronics NV and Others [2007]
EWHC 332 (Ch).

40 Rule 31, CAT Rules.
41 See Rule 31(2) of the CAT Rules, which refers to sections 47A(7) and
47A(8) of the Competition Act 1998.

42 Emerson Electric Co and Others v Morgan Crucible Company Plc and
Others, Case Number 1077/5/7/07.

43 Decision C(2003) 4457 in Case C.38.359. The Commission’s
decision was addressed to Morgan Crucible Company plc, Hoffman
& Co Elektrokohle AG, Le Carbone Lorraine SA, Schunk, SGL and
C.Conradty Hurnberg GmbH.

44 Paragraphs 24 and 25 of the Application for Permission to initiate a
claim for monetary loss pursuant to section 47A of the Competition Act
1998.

45 A related issue is whether a private Tolling Agreement between the
parties in the US, under which it was agreed that the limitation

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UNITED KINGDOM: PRIVATE ENFORCEMENT

period should be extended, can amend Rule 31 of the CAT Rules,

that is liable to repay the money can rely on the claimant being

which requires claims to be brought within two years of the relevant

unjustly enriched in the event that the claimant has been able to

date, that is, the later of the date on which the period to appeal to

pass on some of its losses in its selling prices. In those cases,

the European Court has lapsed, or if such proceedings have been

the European Court of Justice has required a number of cumulative

instituted, the date on which they are determined.

conditions to be satisfied in order for the defence of passing on to

46 Section 2 of the Limitation Act 1980.
47 However, any claim is confined to that part of the wrong committed in
the six years prior to the date upon which the claim form was issued.

48 Section 32 of the Limitation Act 1980.
49 A conditional fee arrangement is where solicitors and counsel agree
to receive no payment or less than normal payment if the case is
lost but normal or higher than normal payment if the case is won.
Currently, the percentage increase on the normal fees if the case is
won can be no more than 100 per cent.

be successful and has as a consequence made it difficult in practice
for the defence to be relied upon.

55 At paragraph 30 of Courage Ltd v Bernard Crehan (Case C-453/99
[2001] ECR I-6297), the European Court of Justice held that
“Community law does not prevent national courts from taking steps
to ensure that the protection of rights guaranteed by Community law
does not entail the unjust enrichment of those who enjoy them”.

56 The OFT notes in this context that national courts are able to take
steps to ensure that claimants are not unjustly enriched.

50 A claimant can take out an insurance policy against the risk of losing
the case. If the case is lost, his disbursements and the other party’s
costs are covered by the insurance.

51 s 51(3) Supreme Court Act 1981; Rule 3.1(2)(m) CPR.
52 CAT Rules, Rule 55(2).
53 In cases involving the imposition of a penalty, for example, the
CAT has indicated that absent exceptional circumstances, it will
‘lean against’ costs orders against unsuccessful applicants since
such appeals impose a significant cost on the public purse (see:

Aberdeen Journals Ltd v Office of Fair Trading supported by Aberdeen
Independent Ltd (Case Nos 1005/1/1/01 and 1009/1/1/02)
[2003] CAT 21, [2004] CompAR 189 at paragraph 20). Also see

57 Hanover Shore Inc v US Machinery Corp 392 US 481 (1968).
58 Illinois Brick Co v Illinois 431 US 720 (1977).
59 In its discussion paper, the OFT has also suggested encouraging the
bringing of lower value private actions by providing for county courts
at Chancery District Registries in England and Wales to hear smaller
individual competition cases (see paragraph 3.3, OFT Discussion
Paper 916 Private actions in competition law: effective redress for
consumers and business, April 2007).

60 See the Commission’s Green Paper COM(2005) 672 final, Brussels
19.12.2005 at paragraph 2.3 and the Commission Staff Working
Paper at section IV.

61 OFT Discussion Paper 916 ‘Private actions in competition law:

the Judgment on Costs dated 8 February 2006 in The Racecourse

effective redress for consumers and business’, April 2007 at

Association and Others and The British Horseracing Board and Others

paragraph 2.11: “In terms of the type of damages that may be

v Office of Fair Trading Case Nos 1035/1/1/04 and 1041/2/1/04,

recoverable, it is well established that private actions involve

in which the OFT was ordered to pay, in respect of the second

claims for damages that are compensatory in nature. In certain

appellant, only £65,450 in respect of the £327,288 of fees incurred

circumstances, the courts may award restitutionary damages, which

by PricewaterhouseCoopers and 50 per cent of the remainder of the

aim to strip away some or all of the gains made by a defendant which

fees amounting to £624,042.30. This was because the arguments

arise from a civil wrong. Furthermore, exemplary damages might be

of the second appellant largely duplicated those of the first appellant

available in certain circumstances in England and Wales.Other forms

and thus added ‘relatively little’ and yet their costs were significantly

of relief, such as the equitable remedy of accounting for profits, may

in excess of those incurred by the first appellant.

also need to be considered in some cases.It will be for the courts

54 However, there have been a number of cases at the EU level,

to determine how the general principles for determining loss or

primarily tax-related, which have involved the overpayment of a

damage in various types of case apply to actions for infringement of

charge and in which the issue has arisen as to whether the authority

competition law.”

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SJ Berwin’s EU and competition department has extensive experience in EU and member state level
competition-related litigation, including judicial review, as well as applications for injunctions and
damages. SJ Berwin represents clients in a number of significant cases before the European Court
of Justice as well as the national courts of the Member States. It also has extensive experience of
advising on and defending alleged cartel cases before the European competition authorities, including the European Commission and the National Competition Authorities of the Member States. This
includes advising on compliance programmes, fines, leniency applications and strategy, handling
on-site inspections, and subsequent investigations by the authorities.
SJ Ber win’s EU and competition department has been a core practice area of the firm since its
establishment. The department is widely recognised as one of the leading practices in EU regulatory and competition law, operating from Brussels, London, Madrid, Milan, Munich and Paris. Three
times voted ‘Competition Team of the Year’ in the UK Legal Business Awards, the team regularly
features in the Global Competition Review’s ‘GCR 100’, a survey of the world’s leading competition
practices.
Unlike many other European law firms, SJ Ber win’s EU and competition practice spans not only
competition law but also a broad range of other areas of EU law, which includes an active regulatory
practice in pharmaceuticals, telecoms, energy and chemicals, an established trade law practice and
a cutting edge EU/competition law litigation practice before both national and EU courts.

Contacts: Lesley Farrell • Tel: +44 20 7111 2884 • e-mail: lesley.farrell@sjberwin.com
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UNITED KINGDOM: PRIVATE ENFORCEMENT

62 See page 2 of the transcript of the Case Management Conference on
26 July 2004.

63 Rookes v Barnard (1964) AC 1129.
64 Moreover, in Manfredi (Manfredi and Others v Lloyd Adriatico
Assicurazioni SpA and Others (Joined Cases C-295/04, C-296/04,
C-297/04 and C-298/04)), although the European Court of Justice

65
66
67
68
69
70

Healthcare at Home v Genzyme Limited 1060/5/7/06.
Rule 46(4), CAT Rules.
Rule 46(4), CAT Rules.
1060/5/7/06.
CA 98/3/03.
This represents about 70 per cent of the loss of revenue (one of the

did not recognise an EC right to such damages, it said that “in

several heads of damage claimed) calculated by the CAT to be at the

accordance with the principle of equivalence, it must be possible to

lowest end of estimates. The case has since settled.

award particular damages, such as exemplary damages or punitive
damages, pursuant to actions founded on the Community competition
rules, if such damages may be awarded pursuant to similar actions
founded on domestic law.” (Paragraph 93). Also see Brasserie du

Pecheur [1996] ECR I-I029).

232

The European Antitrust Review 2008