Court of Appeal upholds certification of McLaren class action for follow-on damages against ro-ro services cartel

13/01/23

The Court of Appeal has refused to decertify a s47B Competition Act 1998 class action brought on behalf of motor vehicle purchasers against “roll-on, roll-off” intercontinental shipping service providers, following on from the EC Settlement Decision in Case AT.40009 – Maritime Car Carriers (21 February 2018). The CAT had granted a Collective Proceedings Order (“CPO”) and rejected applications for strike out / reverse summary judgment in Mark McLaren Class Representative Limited v MOL (Europe Africa) Ltd and Others [2022] CAT 10.

The appellants argued that the CAT had erred, inter alia alleging that the Class Representative’s (“the CR’s”) methodology was incapable of establishing loss by Class Members, and in any event that it failed adequately to account for the appellants’ alternative pricing theories advanced at the CPO stage. The Court of Appeal declined to strike out the CPO, preferring the CR’s arguments that it was possible, at least by the certification standard, to establish loss by reference to “siloed” vehicle delivery charges rather than a vehicle’s “overall” price. The proper measure of loss in this case was a question of fact for trial. The CAT had had sufficient justification to conclude that the delivery charge measure may here be appropriate.

However, the CAT had erred in how it approached its gatekeeping role in collective proceedings. When confronted with two starkly opposing pricing theories, the CAT had stopped in its tracks, rather than considering whether the challenges to the CR’s methodology required it to set out more clearly how it expected the trial to proceed. The Court of Appeal therefore remitted the claim to the CAT to reconsider case management of the dispute on the approach to pricing.

The Court also reopened the “Fulton Shipping point”, ordering that paragraphs 121-124 of the CAT Judgment be set aside. In that passage, the CAT had appeared to dismiss the CR’s argument that reductions in overall vehicle price resulting from downstream negotiations were collateral benefits and irrelevant to calculating loss in respect of the overcharge. One point taken on appeal was that, given that conclusion, the CAT erred in holding the claim should not be struck out. The CR’s Respondent’s Notice, however, pointed out that the CAT had accepted as plausible – at least for certification purposes – the CR’s evidence that it was “rare” for retailers to discount delivery charges, which were considered to be a separate cost item that must be recovered. Therefore, it logically followed that whether there was sufficient causal connection between delivery overcharge and any negotiated discount to vehicle price was a question of fact to be determined at trial. The Court of Appeal concurred.

The other grounds of appeal raised by the parties – including the CR’s cross-appeal to add or substitute personal representatives of vehicle purchasers deceased before the claim’s filing but otherwise within the class definition – were dismissed.

The judgment is available here.