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CAT passes on invitation to strike out pass-on defence

05/07/24

The Competition Appeal Tribunal (CAT) has dismissed an application by certain local authority claimants in the Trucks damages litigation to strike out the truck manufacturers’ pass-on defences: Adur District Council v Traton SE [2024] CAT 45.

The truck manufacturers contend that, if the Trucks infringement led to an increase in the cost of trucks acquired by the local authority claimants, that increase was mitigated in whole or in part by being passed on through increased income or lower costs (e.g. council tax rises or prices charged for services such as bulky waste collection).

The local authorities submitted that such pass-on was impossible because local authorities are not profit-making bodies. They also argued that, if or to the extent that they had passed on any loss, it would be contrary to legal policy for them to be prevented from recovering loss that, on this hypothesis, they would not actually have suffered.

The CAT accepted that the application raised complex issues of fact and interrelated legal questions, which were further complicated by the question of legal policy raised by the local authority claimants. The relevant legal principles were also uncertain due to the application for permission to appeal pending before the Supreme Court in Trucks Trial 1.

As to the factual position, the CAT was satisfied that the evidence before it demonstrated at least an arguable connection between the price of trucks and local authorities’ income. It rejected the Claimants’ argument that the pass-on issues would be “too complex” to be tried, noting that the complexity of an issue was not a reason not to engage with it, and that robust and pragmatic case management would be used to identify a proportionate approach.

The legal argument that local authorities should be entitled to claim for any loss that they had passed on was described as “a novel proposition in law”, which the CAT was not prepared to determine in advance of the trial.

The judgment is available here.

Sarah Abram KC appeared for the MAN, Iveco and Scania Defendants, instructed by Slaughter & May, Herbert Smith Freehills and A&O Shearman.