CAT finds against Law Society in UK's first fast-track standalone claim

The Law Society is a professional body providing services to practising solicitors in England and Wales. In October 2010, the Law Society launched the CQS, an accreditation scheme targeted at firms of solicitors engaged in residential conveyancing. Socrates Training ("Socrates"), a provider of AML training courses, submitted a stand-alone claim (i.e. a claim which does not rely on a pre-existing competition authority's infringement decision) under the CAT's fast-track procedure in April 2016.

Socrates submitted that the requirement to obtain AML training exclusively from the Law Society constituted the tying or bundling of the training with the grant of CQS accreditation. Socrates further alleged that the Law Society had therefore abused its dominant position, invoking Article 102 of the Treaty on the Functioning of the European Union ("TFEU"), and entered into an anti-competitive agreement with member CQS firms, infringing Article 101 TFEU.

Although the Law Society is the only provider of an accreditation scheme for residential conveyancing in England and Wales, the CAT only found evidence of a dominant position from the end of April 2015. This was, the CAT reasoned, the period during which CQS accreditation became a "must-have" product for the majority of conveyancing solicitors since its introduction in October 2010.

As to the abusive conduct, the CAT applied established European Union case law by firstly identifying two distinct product markets: the supply of the training courses; and the supply of accreditation. The CAT then confirmed that the tying resulted in a foreclosure effect, noting in particular that potential competition from other suppliers of mortgage fraud and AML training was actually or potentially impaired, and that this could further discourage market entry. The Law Society's arguments that its behaviour was objectively justified were wholly rejected.

The CAT also found that the Law Society had breached Article 101 TFEU, on largely the same grounds as its breach of Article 102 TFEU. However, as dominance is not required under Article 101 TFEU, the CAT further recognised that the breach may have theoretically occurred before April 2015. Such a finding was, however, difficult to establish on the basis of the available evidence.

The is the first case to proceed under the CAT's fast-track procedure, introduced to the Tribunal Rules in October 2015. The procedure was designed to accommodate simpler and lower value claims brought, in particular, by smaller claimants. Socrates satisfies that criteria, being a microbusiness with an annual turnover of about £750,000 (EUR 860,000) at the time it submitted its claim. Following the CAT's ruling, the parties have been ordered to provide their submissions to determine the level of damages incurred by Socrates. Socrates's submissions on quantum are due in September 2017.

With thanks to Emile Abdul-Wahab of Ashurst for his contribution.