Cartel Participants Bound by Admissions
The Respondents in this Appeal from the Competition Appeals Tribunal (the CAT) bought or leased trucks made by the Appellants. They alleged that the prices they paid for those trucks were artificially inflated by the Appellants’ unlawful participation in a cartel: AB Volvo (PUBL) & Ors v Ryder Ltd and others [2020] EWCA Civ 1475.
The Court of Appeal had to deal with five appeals brought against a judgment of the CAT on a preliminary issue arising in seven damages claims which were ‘follow-on’ claims from infringement decisions adopted by the European Commission on 19 July 2016 in Case AT.39824 – Trucks (the Decision).
Some of the truck manufacturers were addressees of the Decision which found that the addressees had infringed the competition rules by participating in a long running infringement of the competition rules. The Commission imposed fines totalling over €2.9 billion, and there was no appeal to the General Court of the European Union.
The Decision was adopted in accordance with the settlement procedure that applied where parties admitted the infringement alleged against them following the initiation of an investigation by the Commission and which may be rewarded with a 10% reduction in fines in return for settling the case.
The question raised by the appeals was whether it was an abuse of process for the Appellants, in defending the follow-on damages claims brought in the CAT, to put the Respondents to proof of facts that were set out in the Decision and which the addressees admitted in order to settle the investigation into their infringing conduct by the Commission.
Some of the Appellants submitted that if the Court of Appeal was not persuaded by their arguments, then a reference should be made to the Court of Justice of the European Union (CJEU) for a preliminary ruling under Art. 267 TFEU. Such a reference had to be made before 31 December 2020 because after that date the Withdrawal Agreement provided that such a reference was no longer possible.
Yesterday the Court of Appeal (Sir Geoffrey Vos, Chancellor, Flaux and Rose LJJ) dismissed the appeals.
Issue 1: Was the CAT’s application of the English law principle of abuse of process and/or its determination that the non-essential recitals are binding inconsistent with Art.16, Arts. 47 and 48 and/or Art.4(3)?
The Court was dealing with a settlement decision where the Addressees had chosen to admit the truth of both essential and non-essential recitals. As the Addressees specifically accepted, whilst they were required in order to utilise the settlement procedure to admit the ‘main facts’ alleged against them, they could have refused to admit all the facts in the Decision. Instead, the Addressees signed up to a Decision that provided “the facts as outlined in this Decision have been accepted by [the Addressees] in the settlement procedure.”
That gave a clear answer to the Addressees’ arguments on EU law. Where there was a settlement decision and the Addressees had accepted the facts found by the Commission, there was nothing in EU law that mandated the national court in follow-on proceedings to allow non-essential recitals to be challenged or re-litigated.
None of Arts.47 and 48 or 4(3) was engaged once freely made admissions had been accepted as they had been here.
Issue 2: Was the CAT right to hold that the English law abuse of process doctrine was engaged in this case?
In Hunter v Chief Constable of the West Midlands Police and others [1982] AC 529 Lord Diplock said that there was an abuse of process where a party in subsequent proceedings mounted a collateral attack upon a final decision against the party which had been made by another court of competent jurisdiction in previous proceedings in which the party had a full opportunity of contesting the decision in the court by which it was made.
The question in issue was whether the CAT was right to conclude that the Decision was a final decision against the Addressees which had been made by another court of competent jurisdiction in previous proceedings in which they had a full opportunity of contesting the decision.
The settlement process provided extensive procedural safeguards for the Addressees, they were not forced to make admissions and they could withdraw from the settlement process at any stage.
The distinction between essential and non-essential recitals in the Decision was one that related to the extent to which the Decision binds in EU law. It was not relevant to the English law doctrine of abuse of process which did not distinguish between the essential and non-essential parts of a decision.
Issue 3: In applying the doctrine (a) did the CAT fail to apply the necessary ‘high threshold’ and/or (b) was the CAT wrong to hold that there would be manifest unfairness to the claimants and that the administration of justice would be brought into disrepute?
The CAT was entitled to conclude that there would be manifest unfairness to the claimants and that the administration of justice would be brought into disrepute if the Addressees were entitled, in the follow-on proceedings, to contest the admissions they had freely made in the settlement process.
The CAT was also justified in reaching the procedural conclusion that the non-essential recitals were binding on the Addressees unless the gateways were satisfied. Those conditions were appropriately based on procedural rules concerning admissions found in CPR Part 14. The question of whether non-essential recitals were binding in follow-on proceedings, was a matter for national law.
Issue 4: Whether there should be a reference to the CJEU.
There was no need for a reference to the CJEU. The questions raised by Issue 1 were acte clair, none of the parties appealed the CAT’s first legal determination, and the main foundation of the decision was a matter of English procedural law.