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English Court of Appeal Decision Limits Scope for Global Anti-Trust Claims

October 15, 2015

 

On 14 October 2015, the English Court of Appeal handed down an important judgment relating to private anti-trust actions.

Emerald Supplies & Others v British Airways1 is one of the largest and most complex pieces of litigation before the English High Court, with 565 claimants and damages asserted of more than £1 billion. In an appeal from a case management decision, the Court of Appeal upheld the appeal of British Airways (“BA”) and several Part 20 defendant airlines, and struck out two economic tort claims asserted by the 565 claimants. The same judgment also clarified the law relating to material that may be published in decisions of the European Commission, and the right of parties to protect their reputations under the so called ‘Pergan principle’.2

The practical consequence of this decision is that it may deter claimants from using versatile English economic tort claims to expand the scope of cartel civil claims beyond Europe. Similarly, both addressees and non-addressees of EC decisions will be provided with some comfort knowing that claimants in national court proceedings will not be offered an advantage at national level with respect to Pergan material which such claimants could not otherwise obtain at Community level.

The strike-out appeal

The Court of Appeal held that the claims for unlawful means conspiracy and interference with business by unlawful means could not succeed and should be struck out. This was because neither BA nor the Part 20 airlines could possibly possess the requisite intention to injure an identifiable claimant or class of claimants.

In making the decision to strike out the economic tort claims, the Court of Appeal relied heavily on the analysis of the Court of Appeal in Newson Holdings Ltd v IMI plc.3

The Court of Appeal held that the intention to injure must relate to an identifiable class of persons. If the class were to be opened “to anyone in the chain down to the ultimate consumers (which is not in fact how the case is put), this [would] open[s] up an unknown and unknowable range of potential claimants”.4 The court went on to find that there must be an intent to injure a “particular claimant”.5

In what may be a policy decision to limit the use of economic torts in this type of claim, the Court of Appeal held that allowing the torts to extend to persons who are unidentifiable would give rise to “undesirable” results.6 Interestingly, the court held that by so doing “it would extend the effect of competition law and upset the balance which the draftsman had thought appropriate when framing the rules for unfair competition”.7 Additionally, the court perceived this approach as “dilute[ing] the concept of intention and bring[ing] it unacceptably and perilously close to a concept of foreseeability”.8

The Pergan appeals

Certain addressee and non-addressee airlines to the Commission Decision9 were successful in appealing against the decision of Mr Justice Peter Smith ordering the disclosure of an unredacted version of the Commission Decision to the claimant, subject to the protection of a confidentiality ring.

The appellants alleged that Mr Justice Smith’s order infringed their so-called “Pergan rights”. The term “Pergan rights” refers to the rights of non-addressees to EC decisions, namely to the presumption of innocence and the right to protect the non-addressee’s professional secrets, as recognised by European Court of First Instance in Pergan Hilfsstoffe Fur Industrielle Prozesse GmbH v Commission [2007] ECR II-4225.

The Court of Appeal held that there was no basis to permit a judge in national court proceedings to allow a claimant in a damages action to achieve an advantage (namely access to an unredacted, non-Pergan protected, version of the Commission Decision) which such a party could not obtain at Community level.10 The court went further and held that the ambit of the Pergan decision applies equally to an addressee of a Commission decision as it does to a non-addressee.11 Additionally, the delay by the Commission in providing a non-confidential version of the Decision did not relieve the English court of its mutual co-operations under Article 4(3) of the TEU.12

Conclusion

This judgment will have considerable impact on the geographical and temporal scope of the air cargo proceedings going forwards, given that the common law claims in the proceedings have now fallen away leaving the claimants to pursue claims based on breaches of Article 101 of the Treaty on the Functioning of the European Union and Article 53 of the Agreement on the European Economic Area. More generally, the limitation placed on these economic torts will make it more difficult to advance claims that rely upon breaches of competition law outside the EU or EEA.


[1] HC-2008-000002; [2015] EWCA Civ 1024.
[2] See Pergan Hilfsstoffe Fur Industrielle Prozesse GmbH v Commission [2007] ECR II-4225.
[3] WH Newson Holding Limited & Ors v IMI Plc & Ors [2013] EWCA Civ 1377.
[4] At para 169.
[5] At para 169.
[6] At para 174.
[7] At para 174.
[8] At para 174.
[9] The Commission Decision made findings that certain airlines including BA and other airlines addressed in the operative part of the Decision (the “addressee airlines”) had infringed Article 101 of TFEU by participating in a cartel on a global scale with respect to freight services. Certain other airlines were mentioned in the Decision but not identified as infringers (the “non-addressee airlines”).
[10] At para 68.
[11] At para 69.
[12] At para 73.


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