MOL (Europe Africa) Ltd v Mark McLaren Class Representative Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Justice Lewison,Lord Justice Green,Lord Justice Snowden |
| Judgment Date | 21 December 2022 |
| Neutral Citation | [2022] EWCA Civ 1701 |
| Docket Number | Case No: CA-2022-000906; 000922; 000944; 000945 |
| Court | Court of Appeal (Civil Division) |
[2022] EWCA Civ 1701
Lord Justice Lewison
Lord Justice Green
and
Lord Justice Snowden
Case No: CA-2022-000906; 000922; 000944; 000945
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM The Competition Appeal Tribunal
Mrs Justice Falk DBE, Dr William Bishop & Eamonn Doran
[2022] CAT 18
Royal Courts of Justice
Strand, London, WC2A 2LL
Marie Demetriou KC & Daniel Piccinin (instructed by Steptoe & Johnson UK LLP) for the MMW Appellants
Tony Singla KC & Anneliese Blackwood (instructed by Cleary Gottlieb Steen & Hamilton LLP) for the KK Appellants
Sarah Ford KC, Emma Mockford, Sarah O'Keeffe (instructed by Scott & Scott UK LLP) for the Respondent
Hearing dates: Tuesday 8th & Wednesday 9th November 2022
Approved Judgment
Lord Justice Lewison, Lord Justice Green &
A. Introduction
The appeal
This is the unanimous judgment of the Court. It concerns an appeal from the judgment of the Competition Appeal Tribunal (“ the CAT”) dated 18 th February 2022 ( [2022] CAT 10) (“ the Judgment”) in which it made a Collective Proceedings Order (“ the CPO”) and rejected applications for strike out/reverse summary judgment made by the appellants. The CPO combines claims under section 47A Competition Act 1998 (“ CA 1998”) for damages caused by the appellants' breaches of statutory duty for infringing Article 101 of the Treaty on the Functioning of the European Union (“ TFEU”) and Article 53 of the Agreement on the European Economic Area (“ AEEA”). These are “ follow-on” claims where the existence of the breach of duty has been determined by the European Commission (“ the Commission”) in a prior infringement decision adopted on 21 st February 2018 in Case AT.40009 – Maritime Car Carriers (“ the Decision”), following a settlement between the Commission and the appellants which involved an admission of breach. The Decision concerned the provision by the appellants of deep sea carriage of new motor vehicles (cars, trucks and high and heavy vehicles) on various routes to and from the European Economic Area (“ EEA”) which at the relevant time included the UK. Under section 47A CA 1998 the Commission findings are dispositive of breach.
The Class Representative is the respondent and cross-appellant (“ the Class Representative”). It is a company incorporated under the laws of England and Wales specifically for the purposes of bringing the proposed collective proceedings on behalf of consumers who bought new motor vehicles which had been carried by the appellants during the period which the cartel operated. Its sole director and sole member is Mr Mark McLaren, who has experience of working in consumer-related roles. The appellants were defendants before the CAT and divide into two groups: (i) the 1st – 3rd and the 5th – 11th appellants (“ MNW” or “ the MNW appellants”); and (ii), the 4th appellant (“ KK” or “ the KK appellant”). The estimate of aggregate loss (before interest) is between £57m and £115m with the range due to uncertainty as to the applicable overcharge figure. The claim increases to between £71m and £143m if simple interest is included.
The evidence relied upon
The CPO Application was filed on 20th February 2020 by way of a collective proceedings claim form. It was accompanied by documents and evidence setting out the “ methodology” which the Class Representative argued sufficed to establish the impact of the cartel upon motor manufacturers and whether and to what extent any impact upon price was passed on to the members of the proposed class of claimants, so as to justify the grant of a CPO. It was supported by a witness statement by Mr McLaren, joint industry expert evidence by Mr Andrew Goss and Mr Anthony Whitehorn (“ Goss & Whitehorn”), and expert economic evidence from Mr Tom Robinson (“ Robinson”). Mr Goss and Mr Whitehorn are experienced in the automotive industry. Mr Goss is currently Chairman of Vertu Motors PLC (a substantial dealership group) and has previously held senior roles at Jaguar Land Rover, Porsche and Toyota. Mr Whitehorn has held senior roles at Hyundai and Toyota. Mr Robinson is a Director in the forensic practice of BDO LLP. KK served two witness statements: (i) from Mr James Dent (“ Dent”), the Retail Sales Leader at Stratstone BMW, Harrogate, which was a franchisee retailer of BMW in the UK; and (ii), from Mr Neil Cunningham (“ Cunningham”), a self-employed consultant in the vehicle rental and credit hire sector offering consultancy services to private equity investors and financial companies. No factual evidence was served by the MNW appellants in response to the economic and industry expert evidence of the Class Representative. KK served a short, 14-page, expert report from Dr Majumbar of RBB Economics which set out alleged deficiencies in the proposed methodology. MNW served a short report from Dr Tosini of NERA, which was not relied on for this appeal.
The Decision
The Decision found that the appellants had breached Article 101 TFEU and Article 53 AEEA by participating in a single and continuous infringement consisting of the coordination of prices and the allocation of customers with regard to the provision of deep-sea carriage of new motor vehicles to and from the EEA. The infringement lasted from 18 th October 2006 to 6 th September 2012 (“ the Cartel Period”).
The Decision describes the activities of the cartel members as being involved to varying degrees in conduct that sought to: (i) coordinate the prices of tenders; (ii) allocate the business of customers; and (iii) reduce capacity by coordinating the scrapping of vessels. The conduct followed a “ rule of respect” whereby the cartelists would not compete with the business of an incumbent carrier. In paragraphs [30] and [32] the Commission explained:
“(30) … According to that principle, shipments of new motor vehicles related to already existing businesses on certain routes for certain customers would continue to be carried by the undertaking traditionally carrying it (the incumbent).
…
(32) The parties applied the rule of respect as a guiding principle for their practices. Some carriers were considered to be incumbents concerning specific routes and/or specific customers. [confidentiality claim pending], the carriers would respect the business of the incumbent carrier, by either providing a quote above the incumbent's rates, or refraining from quoting. The conduct also covered single and general Requests for Quotations (“RFQs”) (or tenders) issued by certain vehicle manufacturers. … In some cases, the carriers followed the rule of respect only in order to avoid possible conflict among themselves.”
The modus operandi of the cartel was summarised in paragraphs [34] – [38]:
“(34) The parties engaged in various types of contacts, during which they, to varying degrees:
(a) coordinated rates for certain routes and for certain customers, except for CSAV that was engaged in this type of conduct only as of June 2011 onwards. In addition, other participants than CSAV were engaged in coordination concerning the BAF (Bunker Adjustment Factor) and CAF (Currency Adjustment Factor) for certain routes and for certain customers.
(b) allocated various RFQs, and the business of certain customers (including agreements on which party should win the RFQ or business or a certain share thereof and the details of the offers) as well as replies submitted in the framework of contract renewals and annual price negotiations;
(c) discussed and coordinated capacity reductions through scrapping of vessels, except for CSAV; and
(d) exchanged commercially sensitive information as a means to support the conduct described in points (a), (b) and (c) above.
(35) The various types of contacts consisted of the following: – Four Carriers Meetings (“FCMs”); – “3J” meetings; – bilateral contacts.
(36) A significant part of the coordination took place at the FCMs. The FCMs were usually held on a monthly basis in Japan and were attended by the representatives of MOL, NYK, “K” Line and WWL. In addition to the conduct related to routes from Japan (and certain other Asian countries) to the EEA, the FCMs also touched upon operational issues, which fall outside the scope of this Decision.
(37) Trilateral meetings took place between the “3Js”, i.e. the three Japanese carriers: MOL, “K” Line and NYK. Without forming a separate set of arrangements, those discussions concerned certain issues/contracts relevant to the three carriers.
(38) In addition to these, multiple bilateral contacts took place between parties to varying degrees. As not all carriers were present on all trades and did not serve all customers, the carriers participating in these contacts depended on the route and customer involved.”
In paragraphs [51], [56] and [57] the Commission found that one aim of the cartel was to maintain or increase prices on a durable basis:
“(51) Through a combination of multi-lateral and bi-lateral contacts, structured around the “rule of respect”, MOL, “K” Line, NYK, CSAV and WWL and EUKOR engaged with varying intensity, in market sharing, price fixing, customer allocation and capacity reduction, concerning deep sea car carrier services. The parties engaged in such practices with the aim of restricting competition on the market and maintaining the status quo, that is to say, ensuring that the car carriers would keep their respective businesses for certain customers and/or certain routes. They also aimed to...
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