Sainsbury's Supermarkets Ltd v Mastercard Incorporated and Others

JurisdictionEngland & Wales
CourtChancery Division
JudgeMr Justice Barling,THE HONOURABLE MR JUSTICE BARLING
Judgment Date30 November 2015
Neutral Citation[2015] EWHC 3472 (Ch)
Docket NumberCase No: HC-2012-000063

2015 EWHC 3472 (Ch)

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

Royal Courts of Justice, Rolls Building

Fetter Lane, London, EC4A 1NL

Before:

The Honourable Mr Justice Barling

Case No: HC-2012-000063

Between:
Sainsbury's Supermarkets Limited
Claimant
and
(1) Mastercard Incorporated
(2) Mastercard International Incorporated
(3) Mastercard Europe S.P.R.L.
Defendants

(Reasons for Order pursuant to section 16 Enterprise Act 2002)section 16 Enterprise Act 2002)

Mr Justice Barling

Introduction

1

In the course of case management conferences in these proceedings I have raised with the parties the question whether, in view of the enactment of the Consumer Rights Act 2015 ("the 2015 Act") and consequent expansion of the jurisdiction of the Competition Appeal Tribunal ("CAT"), this would be an appropriate case to transfer to the CAT pursuant to the powers invested in the court by virtue of section 16 of the Enterprise Act 2002 (the "2002 Act"), and the regulations and rules of court now made thereunder.

2

On 12 November 2015 I wrote to the parties seeking their views on such a transfer. Both parties have now replied through their respective solicitors. Below I refer to the positions taken by the parties.

3

Having considered all the circumstances of the case, including the parties' comments, I have decided that a transfer to the CAT is appropriate in respect of these proceedings.

4

As this will be the first such transfer, I will set out briefly the legislative history and the background to the court's powers in this regard, before indicating why I consider that a transfer is appropriate in the present case.

History of section 16

5

Prior to the coming into force of the 2015 Act on 1 October 2015, the jurisdiction of the CAT in relation to private damages actions for infringement of competition law was limited to so-called "follow on" claims, almost all of which were brought under section 47A of the Competition Act 1998 (the "1998 Act") (as inserted by subsection 18(1) of the 2002 Act) ("Old Section 47A"). These are claims which follow on from a pre-existing decision by one of the UK competition authorities or by the European Commission (or by a relevant court or tribunal on appeal from one of those bodies) that there has been an infringement of UK or EU competition law (specifically, the Chapter I and Chapter II prohibitions in the 1998 Act and Articles 101 and 102 of the Treaty on the Functioning of the European Union). Curiously, the UK's specialist competition tribunal, the CAT, was not empowered to make such a finding of infringement in the context of a private damages action, although it could do so in the context of an appeal from the decision of one of the UK competition authorities. This was clearly anomalous, as Lloyd LJ pointed out in Enron Coal Services Ltd (in liquidation) v English Welsh & Scottish Railway Ltd [2011] EWCA Civ 2 at [143].

6

The CAT's limited jurisdiction under Old Section 47A meant that stand-alone claims for damages, that is, claims in which the court itself is asked to make a finding of infringement, were, in England and Wales, the sole preserve of the High Court.

7

Subsection 16(1) of the 2002 Act offered a means of partially rectifying the anomaly by giving the Lord Chancellor power to adopt secondary legislation enabling the High Court to "transfer to the [CAT] for its determination so much of any proceedings before the court as relates to an infringement issue". However, no such secondary legislation was brought forward during the period that Old Section 47A was in force. Although the High Court did have the power, pursuant to subsection 16(4) of the 2002 Act, to transfer to the CAT "in accordance with rules of court, so much of any proceedings before it as relates to a claim to which section 47A of the 1998 Act applies", in light of the limited scope of Old Section 47A, this power could only have been used in the context of a follow-on claim.

Recent legislative developments

8

With effect from 1 October 2015, landmark reforms to the procedures for private enforcement of competition law in the UK have been introduced by the 2015 Act, and have significantly expanded the jurisdiction of the CAT in this field. Notably (for present purposes), Old Section 47A has been substituted by sub-paragraph 4(1) of Part 1 of Schedule 8 to the 2015 Act ("New Section 47A"). New Section 47A confers on the CAT jurisdiction to hear inter alia stand-alone claims for damages and, pursuant to sub-paragraph 4(2), applies to claims arising before 1 October 2015 as it applies to claims arising after that date.

9

For the purposes of subsection 16(4) of the 2002 Act, "a claim to which section 47A of the 1998 Act applies" now includes (by virtue of subsections 47A(2) and (3) of the 1998 Act, as amended by the 2015 Act) a claim of the type which is the subject of the present proceedings, namely a claim for damages or any other claim for a sum of money brought in respect of an infringement decision or an alleged infringement of the Chapter I prohibition in the 1998 Act or the prohibition in Article 101(1) of the Treaty on the Functioning of the European Union.

10

Further, in parallel, and also with effect from 1 October 2015, the Section 16 Enterprise Act 2002 Regulations 2015 ("the 2015 Regulations") came into force. These were made pursuant to subsection 16(1) of the 2002 Act and enable the High Court to transfer to the CAT "for its determination so much of" any proceedings before the court as relates to an infringement issue falling to be determined in those proceedings. "Infringement issue" is defined in subsection 16(6) of the 2002 Act (so far as relevant) as "any question relating to whether or not an infringement of (a) the Chapter I prohibition….or (b) Article 101….of the Treaty has been or is being committed".

11

Therefore, the combined effect of these legislative developments is to invigorate the existing transfer provisions set out in section 16 of the 2002 Act.

Relevant changes to rules of court

12

Rules of court have been revised to take account of the legislative developments. Paragraphs 8.3–8.6 of Practice Direction 30 (as in force from 1 October 2015) make provision for transfer under subsection 16(4) of the 2002 Act. Paragraph 8.3 provides that the High Court may order a transfer under that subsection on its own initiative or on application by the claimant or defendant. When deciding whether to make an order the court must consider all the circumstances of the case including the wishes of the parties. Similar provision is made by paragraphs 8.10–8.13 of the Practice Direction for transfers under subsection 16(1) and the 2015 Regulations. The procedural rules of the CAT have also been updated. The Competition Appeal Tribunal Rules 2015 (S.I. 2015 No. 1648) (the "CAT Rules") came into force on 1 October 2015. Rule 72 sets out certain practical requirements following any transfer of proceedings to the CAT.

Specialist nature of the CAT

13

There is no doubt but that the High Court has at its disposal, through its judiciary, considerable skill and experience in dealing with complex litigation, including in the competition field. There are judges who have specific expertise in this area. It is therefore material to reflect on why legislative provision has been made for transfers between the High Court and the CAT.

14

In recent years there has of course been a deliberate movement of some cases from courts with a more general jurisdiction to courts and tribunals whose judges are specialists in a particular field of law. For example, the transfer of some immigration appeals from the Administrative Court to specialist immigration tribunals, and the movement of certain tax appeals from the High Court to the chamber of the Upper Tribunal specialising in tax cases.

15

The 1998 Act recognised that competition law was an area which justified a specialist court to deal, not just with appeals in cases concerning public enforcement of the competition rules, but also with some private law claims for damages. One obvious feature of competition litigation is the almost ubiquitous presence of expert economic evidence, often of a complex and technical nature. Another common feature, related to the last one, is evidence as to the characteristics and dynamics of specific industries and markets. Mindful of these features, Parliament provided for the specialist competition tribunal to have a multi-disciplinary constitution. In this way panels have the potential to include not just lawyers but also, for example, distinguished economists, accountants or industry experts, selected for each case from the members appointed to the CAT by reason of their knowledge and experience in these areas. Expertise of this kind is of considerable assistance in understanding and resolving the difficult issues which are a common feature of competition litigation. This has long been recognised in the UK, the former Restrictive Practices Court having had a similar constitution. Although it is not impossible for a judge sitting on a case in the High Court to enlist the assistance of a court expert, this is relatively uncommon, and there are resource and other obstacles to the adoption of that course on more than very exceptional occasions.

16

Furthermore, CAT panels benefit from outstanding logistical and legal support provided by the CAT staff and legal assistants ("referendaires"). This is of particular value in lengthy and complex actions.

Relationship with the High Court

17

In one important respect the CAT has the best of both worlds, in that it is also able to tap into the expertise of the High Court in this field. For many years High Court judges of the Chancery Division have been appointed as CAT Chairmen, and have regularly sat in the CAT. In this way the CAT is in a position to draw on the assistance of...

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