Arcadia Group Brands Ltd and Others 2013-985 and Others v Visa Inc. and Others
| Jurisdiction | England & Wales |
| Judge | Mr Justice Simon |
| Judgment Date | 30 October 2014 |
| Neutral Citation | [2014] EWHC 3561 (Comm) |
| Docket Number | Claim Nos: 2013-982 to 991, 2013-996 and 2013-1334 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 30 October 2014 |
[2014] EWHC 3561 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
The Honourable Mr Justice Simon
Claim Nos: 2013-982 to 991, 2013-996 and 2013-1334
Stephen Morris QC, Daniel JowellQC and Anneli Howard (instructed by Linklaters LLP) for the 3rd to 5th Defendants ( Applicants)
Brian Kennelly (instructed by Milbank, Tweed, Hadley & McCloy LLP) for the 1st and 2nd Defendants ( Applicants)
Fergus Randolph QC, Christopher Brown and Max Schaefer (instructed by Stewarts Law LLP) for the Claimants ( Respondents)
Hearing dates: 28–30 July 2014
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Introduction
In these actions the Claimants seek damages for breaches of European and domestic competition law in relation to the Defendants' imposition of multilateral interchange fees ('MIFs') in the course of operating the Visa payment-card system.
Payments made with Visa cards in Europe generally involve four parties: (1) a merchant; (2) the merchant's bank (known as the 'Acquirer'); (3) a cardholder; and (4) the cardholder's bank (the 'Issuer'). Both Acquirer and Issuer are licensed by Visa and are contractually required to comply with its rules and procedures.
When the cardholder makes a payment with a Visa credit or debit card, the Acquirer pays the merchant the payment amount less a Merchant Service Charge (the 'MSC'), and passes details of the transaction to the Issuer. The Issuer then collects payment from the cardholder, and pays the Acquirer the payment amount less a transaction fee, known as the 'interchange fee', which the Issuer retains. The MSC paid by the merchant to the Acquirer is made up of (1) a fee for the Acquirer's services, (2) a card network scheme fee payable to Visa, and (3) the interchange fee.
For the purposes of this application it is accepted that the general level of interchange fees is set by Visa, and comprises the VISA MIFs.
The Claimants are or were all well-known high street retailers. Their case is that the MIFs, by setting (in effect) a minimum price that merchants had to pay to their acquiring banks to process payments by Visa card, restricted competition and, but for the illegality, either no MIFs or lower levels of MIFs would have applied. It is said that the Defendants' conduct inflated the MSC which the Claimants paid to their banks when accepting payments by Visa card, and their claim is primarily for damages based on this overcharge.
The proceedings were begun in relation to Claim numbers 2013 Folio Nos.982–991 and 996 on 23 July 2013, and in relation to Claim number 2012 Folio No.1334 on 4 October 2013. The claims are founded on breaches of various provisions of European and domestic competition law for a period going back to 1977.
By applications dated 17 March 2014 the 3rd to 5th Defendants, and by a further application dated 21 March 2014 the 1st and 2nd Defendants, applied to strike out those parts of the Claimants' claims which allege infringements of competition law in the period prior to 23 July 2007 (and, in the case of Claim No. 2013 Folio 1334, in which the 12th Claimant brings the claim, 4 October 2007) under CPR Part 3.4(1)-(2). These dates ('the Limitation Dates') are six years prior to the issue of the relevant proceedings. Alternatively, the Defendants apply for summary judgment under CPR Part 24 in relation to that issue.
The Defendants contend that s.2 of the Limitation Act 1980 (the '1980 Act') provides a defence to tort claims which are brought 'after the expiration of six years from the date on which the cause of action accrued'. Section 9 of the 1980 Act applies to claims for breach of statutory duty in materially similar terms. It therefore follows that the primary limitation period for the present claims (whether viewed as claims in tort or for breach of statutory duty) is six years, and that in so far as the Particulars of Claim raise matters of complaint which occurred before the Limitation Dates they are time barred.
In answer the Claimants rely on s.32 of the 1980 Act which provides (so far as relevant) as follows:
(1) where in the case of any action for which a period of limitation is prescribed by this Act —
…
(b) any fact relevant to the plaintiff's right of action has been deliberately concealed from him by the defendant;
…
the period of limitation shall not begin to run until the plaintiff has discovered the … concealment … or could with reasonable diligence have discovered it.
References in this subsection to the defendant include references to the defendant's agent and to any person through whom the defendant claims and his agent.
(2) For the purposes of subsection (1) above, deliberate commission of a breach of duty in circumstances in which it is unlikely to be discovered for some time amounts to deliberate concealment of the facts involved in that breach of duty.
The present Applications are not directly concerned with whether facts were concealed but with whether there were any facts 'relevant to [the Claimants'] right of action' that they did not know, or could not with reasonable diligence have discovered, before the Limitation Dates. In many cases the concealment of facts will mean postponement of the discovery of those facts. The Defendants say that this is not so in the present case. It is their case that all facts relevant to the right of action were in the public domain before the Limitation Dates, there is no realistic prospect of the Claimants succeeding in their argument under s.32(1)(b), and the claim should be confined to causes of action which arose after the Limitation Dates.
The pleadings
The Claimants address the limitation issue in §76 of the Amended Particulars of Claim which the parties used as illustrative, Record Shop 2 Limited (in liquidation). The 'initial claim period' is described as six years immediately preceding the date of the issue of the claim. Paragraph 77 asserts that the infringements of competition law concerning the UK MIF are continuous in nature, and that the Claimants are entitled to recover in respect of the continuing breach of statutory duty. The issue under s.32 of the Limitation Act 1980 is raised in §78, where it is contended that the claim extends back to 31 January 1977. In §§79–80 reliance is placed on s.32(1)(b) and what is said to be the deliberate concealment of facts which could not have been discovered with reasonable diligence.
Paragraph 81 reads as follows:
Key facts relevant to the breaches of statutory duty pleaded above were deliberately concealed from inter alia the Claimants. The Claimants will rely on the following facts and matters in this respect:
a. The manner and mechanisms by which the EEA MIF, UK MIF and Irish MIFs were and are set are secret and have never been disclosed to the Claimants.
b. At all material times, the precise nature and scope of the MIF arrangements were concealed from the Claimants.
c. At all material times, the responsibility of the various Defendants for the breaches of statutory duty pleaded above were concealed from the Claimants.
d. Until around 2009, the actual MIF levels which applied were concealed from the Claimants.
It will be necessary to consider some of the words and phrases used in §96 later in this judgment.
The 3rd to 5th Defendants deny that any of these four matters were necessary to plead a completed cause of action (see §85 of the Amended Defence) and that, even if they were, the Claimants either had, or could with reasonable diligence have acquired, such knowledge in the light of the history summarised at §84 of the Amended Defence.
In §37 of the Amended Reply the Claimants take issue with this plea and the availability of the relevant facts.
It is denied that the facts and matters there listed made sufficient facts publicly available (or available to the Claimants given reasonable diligence) to establish a prima facie case against each Defendant. Without prejudice to that general denial, and in respect of both paragraph 84 and paragraph 88, the Claimants note that neither the OFT nor the Commission have permitted access to their respective files.
Similar points are made by the Claimants in relation to the EEA and Irish MIFs.
The applicable law
It is convenient at this stage to summarise the law in five areas: (1) the statutory basis for the claims, (2) the Court's approach to applications under CPR Part 3.4 and CPR Part 24, ( 3) s.32(1) of the 1980 Act, (4) pleading in competition cases and (5) the effect of the Directive of the European Parliament and the Council on Certain Rules Governing Actions for Damages under National Law for Infringements of the Competition Law Provisions of the Member States and of the European Union, approved by the European Parliament on 17 April 2014, and approved in a form incorporating technical corrections by lawyer-linguists on 21 October 2014 ('the Directive').
(1) The basis for the claim for...
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