Competition Appeal Tribunal delivers judgment on FX cartel collective proceedings applications

08/04/22

On 31 March 2022, the Competition Appeal Tribunal handed down a significant judgment concerning the UK’s nascent regime for collective proceedings in claims for damages arising from infringements of competition law.

Under section 47B of the Competition Act 1998, collective proceedings may be brought before the Tribunal combining two or more claims for damages arising from infringements of competition law. Collective proceedings may be brought on an ‘opt-in’ basis or on an ‘opt-out’ basis. In the former case, the claim is brought only on behalf of members of the class who decide to opt in, while in the latter case, the claim is brought on behalf of all members of a defined class save for those who opt out. In each case, in order for the collective proceedings to go ahead, the Tribunal must make a collective proceedings order, or CPO, certifying a proposed class representative as authorised to represent the class.

In this case, two separate proposed class representatives (‘O’Higgins’ and ‘Evans’) had applied for certification of collective proceedings on an opt-out basis seeking to claim damages arising from two cartels in the foreign exchange market found by the European Commission. The addressee banks had previously settled claims allegedly arising from alleged collusion in the foreign exchange market for $2.3 billion in US class action proceedings.

In the UK collective proceedings, the Tribunal had to consider (i) whether the applications should be certified at all, and, if so, (ii) whether it should be on an opt-out or opt-in basis, and (iii) which proposed class representative should go forward. Based principally on its assessment of the “strength” of the two applications and on its interpretation of “practicability” within the statute, the Tribunal stated that it would not certify the claims as brought on an opt-out basis, but only on an opt-in basis.  On this basis it stayed both applications giving both applicants permission (if so advised) to submit a revised application for certification on an opt-in basis within three months of the date of the Judgment.  As a result of its disposition, the issue of carriage of an opt-out claim did not arise, but the Tribunal stated that it would have very marginally preferred the Evans application to the O’Higgins application. 

One member of the Tribunal dissented, considering that collective proceedings should be allowed to proceed on an opt-out basis. Both proposed class representatives have indicated an intention to appeal.

The judgment is available here, and the Tribunal has provided a summary here.