Umbrella Interchange Fee Claimants v Umbrella Interchange Fee Defendants

Hearing dates: 3 and 4 December 2024

Approved Judgment

This judgment was handed down remotely at 10:00am on Thursday 19 December 2024 by circulation to the parties or their representatives by e-mail and by release to the National Archives.

Sir Geoffrey Vos, Master of the Rolls:

Introduction

This is an appeal in the continuing Multilateral Interchange Fees (MIFs) litigation from a decision on limitation made by the Competition Appeal Tribunal (the Tribunal) on 26 July 2023. The appeal raises a single central question as to the effect in England and Wales of decisions of the Court of Justice of the European Union (CJEU) that are delivered after 31 December 2020, the Implementation Period Completion Day (completion day). That question turns on the meaning and effect of the European Union (Withdrawal) Act 2018 (the Withdrawal Act). It may be noted that the Withdrawal Act was significantly amended with effect from the end of 2023, but those amendments are not relevant to what we have to decide.

The question as to the effect of post-completion day CJEU decisions arises in the context of claims by the claimants against the Visa and Mastercard defendants in respect of alleged multiple and continuous infringements of article 101 of the Treaty on the Functioning of the European Union (TFEU), Chapter 1 of the Competition Act 1998 and the domestic competition laws of other European Economic Area states. The claims relate to MIFs set and implemented by the defendants to be paid between issuers and acquirers since about 22 May 1992, which the claimant merchants (some 2,300) allege were passed on to them by their acquirers.

The claimants argued before the Tribunal that the EU law principle of effectiveness required that a limitation period for a claim founded on an alleged infringement of articles 101 (and 102) of the TFEU only began to run once the infringement had ceased. This alleged principle of EU law has been referred to by the parties as the “Cessation Requirement”, and that is how I shall refer to it in this judgment.

The Cessation Requirement was included in what the CJEU said in the post-completion day case of Volvo AB and DAF Trucks NV v. RM (2022) ( Case C-267/20) ( Volvo) at [61]:

… it must be considered that the limitation periods applicable to actions for damages for infringements of the competition law provisions of the member states and of the European Union cannot begin to run before the infringement has ceased and the injured party knows, or can reasonably be expected to know, (i) the fact that it had suffered harm as a result of that infringement and (ii) the identity of the perpetrator of the infringement [emphasis added].

The Tribunal decided, in essence, three things. First, it analysed the CJEU's decision in Volvo, concluding at [33] that the CJEU had not decided that, as a matter of EU law, limitation periods for competition law infringements could not start to run before the infringement of competition law had ceased.

Secondly, the Tribunal considered the matter on the premise that, contrary to its first conclusion, Volvo had decided that EU law imposed a Cessation Requirement. On that basis, the Tribunal held that it was not bound under the Withdrawal Act to follow Volvo. The Tribunal's two essential reasons were:

i) The claimants' causes of action which had accrued pursuant to EU law prior to completion day were translated into retained EU law pursuant to section 4(1) of the Withdrawal Act, subject only to section 6 of the Withdrawal Act, which did not make post-completion day CJEU decisions binding (see [44], and [68]–[69]).

ii) The Tribunal was bound to follow the Court of Appeal's pre-Brexit decision in Arcadia Group Brands Ltd v. Visa Inc. [2015] EWCA Civ 883, [2015] Bus LR 1362 ( Arcadia) (see [28(4)]). Arcadia had decided that EU law did not impose any Cessation Requirement upon English law limitation rules.

Thirdly, even on the basis that the Tribunal could “have regard” to Volvo under section 6(2) of the Withdrawal Act, it decided that the EU law principle of effectiveness should not be held to incorporate a Cessation Requirement into the English limitation rules (see [28]). Volvo, therefore, had no effect on either the English or Scots law limitation regimes.

Since the Tribunal's decision, there have been two new cases that the parties agree are relevant to this appeal.

The first new case is Heureka Group a.s. v. Google LLC (2024) ( Case C-605/21) ( Heureka), decided by the CJEU on 18 April 2024. The claimants contend that Heureka decided that the Cessation Requirement had always been a binding rule of EU law arising out of the general EU law principle of effectiveness.

The second new case is Lipton v. BA Cityflyer Ltd [2024] UKSC 24, [2024] 3 WLR 474 ( Lipton), decided by the UK Supreme Court (UKSC) on 10 July 2024. The defendants contend that the majority in Lipton (Lord Sales and Lady Rose, with whom Lord Burrows concurred and Lady Simler agreed) favoured what the UKSC called the “complete code analysis” of the Withdrawal Act. Under the complete code analysis, a claimant's right to pursue a cause of action that is based on facts which occurred before completion day, and having regard to EU law which was then applicable, is brought forward as part and parcel of the bringing forward of the law itself under whichever of sections 2, 3 or 4 of the Withdrawal Act is relevant. A pre-completion day cause of action is “retained EU law”. Section 6 of the Withdrawal Act applies to such claims, so that the court is not bound by post-completion day CJEU case law, but may have regard to it. The majority of the UKSC in Lipton expressly considered the Tribunal's reasoning described at [6(i)] above. The defendants submit that Lipton binds us to decide that Volvo and Heureka are not binding on us.

The claimants advanced four grounds of appeal that will require some reinterpretation in the light of these two new cases. In essence, the four grounds were as follows:

i) Ground 1: The Tribunal misinterpreted Volvo. It should have held that Volvo decided that the Cessation Requirement was an existing (not a new) binding principle of EU law (as subsequently confirmed by Heureka), and a necessary corollary to the EU law principles of effectiveness and legal certainty.

ii) Ground 2: The Tribunal ought to have found that the Cessation Requirement applied to the claimants' accrued pre-completion day rights under sections 2(1) and 3(1) of the European Communities Act 1972 (ECA 1972), as preserved by section 16(1) of the Interpretation Act 1978. This was what the UKSC described in Lipton as the “ Interpretation Act analysis”, which was favoured only by Lord Lloyd-Jones.

iii) Ground 3: Even if Volvo did not mandate the Cessation Requirement, the Tribunal ought to have given it effect by “having regard” to it under section 6(2) of the Withdrawal Act.

iv) Ground 4: The Tribunal should have enforced the Cessation Requirement by a conforming construction of sections 2 and/or 9 of the Limitation Act 1980, or by disapplying those limitation provisions.

In the light of Heureka and Lipton, and the way the appeal was actually argued by the claimants, it seems to me that the issues that we need to resolve are as follows: (i) Should this court follow Lipton's complete code analysis and decide that the Tribunal was right to think it was not bound by Volvo and Heureka as post-completion day CJEU decisions? (ii) If so, were the claimants nevertheless right to submit that Volvo and Heureka should be followed, because those cases simply declared that the Cessation Requirement had always been part of EU law? (iii) In any event, is the court bound by Arcadia to hold that the Limitation Act 1980, as it applies to competition claims, accords with the EU law principle of effectiveness, and that a Cessation Requirement (as required to be imported into English law on a prospective basis by article 10 of the Damages Directive (2014/104/EU)) is new law and was not part of EU law at the time of Arcadia?

The claimants' main oral argument was based on section 6(2) of the Withdrawal Act (section 6(2)), which provided that the court could “have regard” to post-completion day CJEU decisions. It was submitted that section 6(2) did not override or abrogate section 4(1) of the Withdrawal Act (preservation of pre-completion day rights, powers, liabilities, obligations, restrictions, remedies and procedures recognised by section 2(1) of the ECA 1972) or section 5(2) of the Withdrawal Act (supremacy of pre-completion day EU law). Sections 4(1) and 5(2) preserved the Cessation Requirement that had always been an essential element of the EU law principle of effectiveness, even if that was not entirely transparent before Volvo and Heureka. Since it was now clear that EU law had always required...