Anti-trust and collective actions: 2023 in review

Anna:

Hello and welcome to this podcast, the sixth in our series, looking at aspects of class actions. I'm Anna Morfey and I'm a partner at Ashurst focusing on antitrust litigation. I'm joined by my partner Tim West, who focuses on antitrust and other commercial disputes, and by our senior associate Max Strasberg whose practices [is] similar to mine and Tim's. In this episode, we're going to be looking at what's gone on in the world of UK antitrust collective or class actions this year, and there's certainly plenty to talk about. Now we're recording this episode at the end of November, so admittedly we're a little premature and there will be some more developments before the year is out, which we'll allude to. But given so much has gone on in 2023, we thought we'd take stock and give you some listening material as you head off for well-earned end of year holidays.

Tim:

Okay. So, we're going to look at four areas of development in the antitrust class action regime. First, certification, second, issues that have arisen in cases post-certification, third, case management issues, and fourth, some thoughts on what we think are the biggest issues of the year overall and what we might think is coming up in 2024. So, without further ado, let's get started. Anna, before we delve into certification, do you want to kick off by standing back and looking at where we are at the end of November when we're recording this in terms of the antitrust class action landscape here in the UK and the CAT in particular?

Anna:

So, there are a little over 30 collective actions that are currently in the CAT. 14 of those have been certified already and the others are at the pre-certification stage. We haven't yet had any judgments. We've got the first trial, which is in Patourel v BT, which is listed for January next year. Nor have there been any settlements yet in these cases. The first one of those, which is in the McLaren case, the maritime car carriers or Ro-Ro case, which is due to be heard by the CAT in early December, and we may put out a short update on that after the hearing. Max, do you have any other comments about what's going on in the CAT at the moment in terms of the profile of the cases?

Max:

Well, as you say, Anna over 30 of these cases have been commenced now, and in terms of profile, there's a majority of consumer claims as you might expect in a class actions regime, but still about a third of them are business claims. Most claims are opt-out rather than opt-in, and most of them something like two-thirds are standalone abuse of dominance claims rather than cartel follow-on claims. And I'll come back to why that's interesting a bit later when we talk about the year's standout developments.

Anna:

All right. So, with that, should we turn to look at the first topic, which is certification? And Tim, do you want to kick that off?

Tim:

So, it's been quite a big year for certification. I think it's just worth reminding ourselves what the state of the world was from a certification perspective as 2022 came to a close and this year began. So, listeners might recall that it was about this time last year that we'd just had the Court of Appeal decision in the Ro-Ro class action in which the Court of Appeal laid out some guidance for the CAT in terms of its gatekeeper role. And in particular as regards scrutinising the methodology advanced by the class representative for establishing class-wide loss on an aggregate basis.

Notably the Court of Appeal observed, there were clear battle lines that had been drawn between the experts who had competing and opposed methodologies, which the CAT had identified, but had also said that that was a battle that was going to be fought at trial. And the Court of Appeal thought that that was an error in approach. It said that once the CAT had decided to grant certification, the CAT should have gone on to address the ramifications of the challenges to the PCR's methodology. And they said further that the CAT's gatekeeper role, part of this was to lay out a pathway for opposing sides to provide detail in their expert methodologies and then respond to one another.

Anna:

And the CAT developed that further in the first major certification judgment this year in Gormsen v Meta, which re-emphasised the CAT's role as gatekeeper and the need for a blueprint to trial. Do you want tell us a bit about that?

Tim:

Many people were eagerly anticipating this judgment, being a fairly novel claim that was bought against Meta on behalf of all Facebook users between 2015 and 2019 I think it was. And Ms. Gormsen herself as the PCR the CAT found had failed to plead adequately the three alleged abuses such that it wasn't clear that two of the three abuses could actually be said to be competition law abuses. So, put simply they thought that the theories of harm just weren't satisfactory, and they thought that there wasn't enough nexus between the breach of competition law and the expert methodology for determining the harm and estimating the damage. And they found that the PCR's expert had failed to adequately frame that counterfactual and that there was no method of quantifying damages.

And what all of that meant was that the absence of such counterfactual methodology was that applying the Court of Appeal's judgment in McLaren, there was no requisite loop into trial and the CAT found they couldn't leave the determination of those points simply to matters after certification. So, the PCR was sent off to do it again and there is a hearing, a further certification hearing that's going to take place at the start of next year. So, I think it's fair to say that all of that represented quite a shift in approach from the CAT in terms of what it was expecting from PCR experts as regards methodology.

Anna:

And then midway through the year we saw another CPO application, or rather a series of four CPO applications, be rejected this time in the CICC litigation which relates to the interchange proceedings. And the tribunal in those cases held that there were a number of unsatisfactory aspects of the proposed collective proceedings. Do you want to tell us about that?

Tim:

Yes. That's right. And relevantly, this included what they called a disregard for the clear requirements arising from the Pro Sys test, which is the name given for the Canadian piece of a jurisprudence Pro Sys v Microsoft that's been supplanted into English law for these purposes. And they found that there was no methodology advanced at all for certain aspects of the proceedings. So, in a sense, despite the relatively low bar set by the Supreme Court in Merricks this year, I think has been characterised by the pendulum swinging back to some extent with a lot of focus on the Pro Sys test and the requisite methodology giving the so-called blueprint to trial. But there have been some cases that we've seen go the other way this year in terms of certification. Anna, do you want to say a few words about those?

Anna:

Yes. So, there were two this year. The first one regards the Apple Battery Life Claim, the Apple obsolescence claim, that was a claim brought against Apple on behalf of various users of iPhone models 6 and 7 in relation to basically to power and battery life issues that those phones had. And that claim is pitched as an abuse of dominance claim by Apple on behalf of those iPhone users. The theory broadly being that Apple is effectively dominant in relation to those ecosystems, and so the captive customers are subjected to Apple's conduct, which is alleged is abusive. Those claims were filed last summer, so 2022 and there was an initial certification hearing in that claim in early May this year, 2023. And at that point the CAT declined to certify the claim, but it said the PCR, the proposed class representative, needed to address some factual issues in relation to the abuse of dominance claim. But what the CAT did is to order disclosure from Apple to allow the PCR to address those issues, which it did. And there was a further two-day certification hearing held in September this year, and a judgment recently handed down on the 1st of November where the CAT did certify the claim. So, the second time round subject to the class representative amending his funding arrangements to bring them into line with the requirements of another Supreme Court judgment this year in the PACCAR case, which we've spoken about in another podcast in this series. And we'll come back to that a little later on. So, broadly speaking, subject to those funding arrangements, this Apple obsolescence claim has now been certified. Apple's applications in that claim for reverse summary judgment on strikeout were rejected. And so, that claim is now expected to be proceeding once the funding arrangements have been sorted out.

Tim:

Yeah. And then most recently, at least at the time of recording, a further case was recently certified the Sony case with judgment being handed down on the 21st of November. Anna, do you want to tell listeners a bit about that?

Anna:

Yeah, so the Sony claim is one that was brought against Sony on behalf of consumers in relation to restrictions concerning Sony's PlayStation ecosystem essentially. And that's about access to games on the PlayStation store and interoperability with third party apps and so on. Now, this claim had a three day certification hearing back in June and a further certification hearing in October around the PCR, the proposed class representative's funding arrangements following the PACCAR judgment in the summer. And at the October hearing, Sony made several arguments challenging aspects of the PCR's funding arrangements on substance. Sony not only opposed certification but also applied for strikeout or reverse summary judgment. And in a judgment on the 21st November, the CAT dismissed those challenges, but I think it's worth noting what they are as they obviously give the CAT's view on what the impact of PACCAR is and the judgment may yet be appealed. So I think that's not necessarily the end of the story. First on the substance of the claim, the claim was certified but with one tweak, and I'll come to that in a second. The Tribunal considered the Pro-Sys test was met, so Sony's challenges to the PCR's methodology were dismissed. Sony also challenged the PCR's expert. It argued that the expert was essentially too partisan in the data it was using. But that challenge was also dismissed and the CAT had some sympathy for the limited data available to the PCR and her expert and thought that there had been sufficient transparency around data sources the expert used, but the judgment is an interesting one in terms of looking at what the PCR's expert should and shouldn't be using by way of data and disclosing by way of limitations to that data. So it's worth a look on that front as well.

Sony's strikeout/reverse summary judgment applications were dismissed, as I said. The Tribunal thought that the issues on which Sony sought strikeout/reverse summary judgment , which included reasonably involved arguments around whether the abuse in the case that was alleged, was in essence a refusal to supply and therefore brought in the Bronner criteria. Now those issues, the CAT thought needed proper exploration at trial, so they got fairly short shrift by way of strikeout summary judgment application. And again, I think this is another example of the CAT rejecting strikeout reverse summary judgment applications at the certification stage. So it's worth a look on that front as well.

I mentioned the tweak. The tweak that the PCR had to make in respect of the claim was around the class definition. The PCR in this claim, and I think for the first time before the Tribunal was seeking to include claimants who effectively weren't yet claimants as at the date the claim was filed, but may purchase PlayStation products going forward. So there was a prospective element to the PCR's class definition and the Tribunal held that she couldn't do that, so she had to revise that aspect of the claim, but other than that, the claim was certified.

Now the sort of coda to the judgment , which is quite significant is obviously regarding the funding arrangements, which were the subject of the later October hearing. And on those, the Tribunal rejected Sony's wider interpretation of the impact of the PACCAR Supreme Court rulings. So on those, the Tribunal found that a return to the funder based on multiples of funds committed is not unlawful post PACCAR. It was also according to the Tribunal acceptable to have a provision in the PCR's funding agreement that would allow a damages-based return if PACCAR is reversed. And we've talked a bit about whether that's going to be likely, but that's at the moment anyway, widely anticipated. And overall, the CAT concluded that the funding arrangements didn't create unacceptable risks of perverse and unmanageable incentives for the PCR. And so, on the whole, the judgment blesses the funding arrangements, doesn't take a broad interpretation of the impact of PACCAR. As I've said, the judgment covers quite a few issues. It may yet be appealed. So I think it's one to watch, but it is quite a detailed judgment. I think it goes to about 65 pages. So that's one that is worth reading.

A couple of other points to mention in relation to certification relate to carriage disputes. We've seen a couple of cases also this year in which the CAT has changed its approach to carriage disputes, I think it's fair to say, and started hearing those much earlier in the proceedings than they used to. The first two carriage disputes that ever came before the CAT were in the foreign exchange, Forex and the Trucks claims. Both of those were addressed this summer by the Court of Appeal. So, both of those were addressed this summer by the Court of Appeal. And Max, do you want to talk a little bit more about those?

Max:

Yeah. Let's start with Forex, which was two competing claims by two competing class representatives, Evans and O'Higgins. The CAT refused to certify either of them on an opt-out basis, they needed to be opt-in. Now the Court of Appeal confirmed this last summer and went on to certify the Evans claim - that was the one that the CAT preferred but didn't go as far as to certify. And there was a bit of a debate between the CAT and the Court of Appeal as to whether it had jurisdiction to do that or whether it was the CAT's decision. And the Court of Appeal issued another judgment saying that it does and remitted it back to the CAT to move forward.

And then we have Trucks where there was a choice to be made between the Road Haulage Associations opt-in claim on behalf of its members and a claim from an SPV called UK Trucks Limited, which was opt-out or opt-in the alternative. And there the CAT certified the RHA claim and that was upheld by the Court of Appeal in the summer. But what the Court of Appeal did say is that, the direct and indirect purchasers would need to be separately represented subclasses because of the risk of conflicts of interest, but the RHA would remain the overall class rep. Now that all took quite a long time to sort out, but Anna, the CAT's been recently trying to approach this a bit differently, hasn't it?

Anna:

Yes. So, since then we've had two further carriage disputes coming along with a bit of a different approach. Unlike in Forex and in Trucks, the carriage dispute between competing class representatives has been heard in advance of the full CPO hearing. The first one of those relates to claims against Google relating to the ad-tech or intermediation services. There's two competing class representatives, Pollack and Arthur. What happened in that claim was that the PCRs, the competing PCRs in fact proposed, got together and proposed to consolidate their claims and worked together. And so, at a hearing, the CAT effectively accepted that and ordered a timetable for a consolidated collective proceedings claim form to be refiled by the newly composed joint class representatives and for a CPO hearing to take place on that one in 2024. So, although that started off as a potential carriage dispute, in the end, the competing PCRs effectively did a deal, came to an agreement between themselves to work together. The second carriage dispute that is still at large relates to claims against Amazon relating to alleged abuse of dominance conduct concerning the buy box and their claims by Hunter and Hammond. There is seemingly no similar consolidation proposal that is in public domain in any case in those cases. And that is a carriage dispute that's due to be heard in December. So again, we may do a short little update on that, but that looks like that could be the first standalone carriage dispute that the CAT will hear in a few weeks' time.

Tim:

Okay. Coming to the second issue of our four topics post certification matters. I think Max you were going to talk us through a few aspects of that.

Max:

So, one development I thought was worth mentioning is the CAT's ruling on limitation in the interchange litigation following the ECJ judgement in Volvo earlier in the year. And I guess it's interesting for two reasons. First, because limitations very often are hard for issue in cartel damages litigation. And secondly because the judgement is, I think the first time the CAT has considered the impact of ECJ decisions issued post Brexit. So, what happened there is that the ECJ decision in the summer in the context of the Trucks litigation that confirmed that the limitation period mandated by the Damages Directive doesn't start running until the infringement has ceased and the victim knows the information necessary to bring a claim arising from it. And on that basis, it concluded that time started to run from the publication of the decision. But fast-forward a bit and the CAT needed to determine the extent to which any of that applies in the UK post-Brexit.

It wouldn't apply to many claims currently on the docket because they concern causes of actions which arose before the Damages Directive was incorporated into the Competition Act, but it could bear on future claims. But the CAT said, No, not bound by the Volvo decision because it was issued post-Brexit. The claimants argued that it's binding because their claims amounted to accrued EU law rights which remain subject to EU law post-Brexit. The CAT dismissed that and said there's no such thing. And generally, the only gateway by which EU law can continue to apply in practice is as retained EU law under English law. So that gives you a decent sense of how the CAT's going to deal with these Brexit interpretation questions that are bound to come up again.

Now there's a lot of commentary as to the significance of this judgment and although it's obviously symbolically significant, it'll be interesting to see whether it makes a huge difference to the arguments that are already available to claimants to extend limitation periods under English law. There are similar tools to what you see in the Damages Directive in the Limitation Act itself, and although they might not enable a claimant to delay time running all the way until a decision's published, there'll often be arguments to buy some time on the grounds of concealment. But if nothing else, we see the CAT being independent. And Tim, I know you've seen plenty of examples of that independence, you might even say creativity in a case management context.

Tim:

Yeah. That's right. I mean, one post certification issue that I think it is worth spending a bit of time talking about, I suppose is really a continuation of what I was saying earlier in the McLaren collective proceedings. So, obviously the CAT had the benefit of the guidance given from the Court of Appeal that I was referring to earlier, and it held the CMC in the McLaren Ro-Ro cartel case in February I think it was this year. Faced with the problem, what it was going to do with these polar opposite expert cases I should say, and the methodology that were being run by the experts in those proceedings. And the Tribunal noted at the CMC that it would be unwise to assume that methodological harmony would break out and it would actually be in principle wrong for them to impose that. And they weren't going to force through any attempts to create harmony as that was just going to do nothing but increase costs and delay.

Anna:

And so, what did the CAT do in that position?

Tim:

Well, there was a CMC at the start of February, and they ordered a process whereby the methodologies of the experts and the cases would be articulated by the parties in parallel, which is not obviously the case, it normally happening in sequence. And that course was adopted because the Tribunal concluded that the parties weren't really in truth advancing or intending to advance responsive cases at all, but they were just pressing their own cases while independently throwing rocks at their opponent's cases. So that led to this series of directions that I think is quite novel whereby the class representative and the defendants were directed to file and serve their witness statements of facts, their signed expert reports and all documentary evidence that they intend to rely upon in support of their own positive case, together with a position statement explaining how by reference to that evidence they intend to establish their case.

And those so-called "positive case statements" were to be followed not less than four months, I think it was later by "negative cases". Where again, witness statement of fact expert reports or documentary evidence explaining how they intend to approach their negative case. And then alongside that, the CAT has got this expert-led disclosure process where on the facts of the case, a lot of that disclosure actually needs to come from non-parties or class members. And that's led to another ruling on communications with the class that I think we'll come to later. But I thought that was pretty interesting for basically two reasons. One, because it reflects a broader interventionist case management approach from the CAT that we certainly saw on Trucks. And in particular it's quite an interesting practical implementation of the desire to prevent the often referred to "ships-in-the-night" problem through case management and ensuring that the disclosure's expert-led. And I think the other reason, the second reason is how novel it is. And as I understand that process, it's essentially akin to a memorial style arbitration approach and the novelty doesn't end there.

Anna:

And so, how is that going to impact the trial?

Tim:

Well, there was actually a direction given about how the trial was going to go. And I don't think it's good podcast content to read transcripts from CMC proceedings, but it is interesting to note that the President of the CAT, was quite clear that the parties should be under no illusions as to how the trial would go. And what he's essentially said was that whereas the normal process obviously is that parties put on their witnesses of fact and then they decide who they would call. The directions that he gave was that basically if you have a witness as part of your positive case, they were going to have to turn up and he said that, this wasn't a case where the parties had any choice in that. And that ship would sail with the induction of a positive case. And he said, "From this it follows, there will be no rabbits from hats at trials. If you have not articulated your attack in your negative case, then things are going to go pretty bad before you at trial." I think that speaks for itself really and shows the extent of what the Tribunal called "the extreme case management" that the CAT thinks is necessary to adhere to the Court of Appeal's guidance.

Anna:

And Tim, I mean we haven't seen other cases, I think it's right to say using this positive/negative statement setup. And I just wonder, do you think that's because in the maritime car carriers' case, the Ro-Ro case, there's just so many defendants that the CAT feels that it might get a little out of hand if some structure isn't imposed. I'm just thinking about a number of the cases that are working their way through that were maybe certified last year or even before, but maybe they tended to have few defendants. Do you think this is sort of the way the CAT is now going to start case managing claims like this?

Tim:

Yeah. I think it's interesting. I mean, the Sony judgment that came out yesterday, the Tribunal had some concerns about the potential for the expert evidence to go off in divergent ways. I don't think that they thought that it was quite the case of "ships in the night" as in the case in the McLaren case. But they did nevertheless highlight similar concerns and they did feel it was necessary to tackle this head on, again, I think heeding the guidance from the Court of Appeal. And interestingly what their solution, which is a different solution to this positive case/negative case approach, is that they would have the Tribunal in its judgment produced a list of issues that they said would form the basis of a hearing at which experts will be asked to speak to their approaches and answer questions from the Tribunal.

And that was likely to take the form of a hot tub. And obviously, hot tubs are now pretty common, particularly in the CAT, but I'm not aware of a hot tub being used in advance, effectively as a case management tool. And interestingly, the judgment says that this hot tub approach is... I mean, it's going to be tribunal-led, that's not uncommon. But it expressly makes the point that counsel will not be permitted to question their own party's expert or the other party's expert, but they will after the event be permitted to file written observations as to how it went and its relevance. So, it's clearly an issue that the CAT is really focused on and I think an interesting different approach to a solution of dealing with the issue of divergent approaches from experts.

Max:

And Tim, do you think there are parallels between what the CAT's been doing there and the approach it took to disclosure in some of the other cases with Redfern schedules for example?

Tim:

Definitely. That's exactly what I thought of actually. I mean, that was obviously our own experience on Trucks. There was that Tribunal ruling as to that was pretty early on from memory of not too long after pleadings closed, as to how the Tribunal thought that disclosure was going to be approached and that it was in terms of the expert methodologies needing to be a top-down rather than the bottom-up approach. And the natural extension of that was that process as we and all the other parties lived and breathed, which was those Redfern schedules that had all that expert input. It's that parallel of the expert-led approach. And you can see that that is another parallel to that approach of the Tribunal trying to keep a handle on how the case is going to develop and making sure that the expert issues remain really at the heart of the issues that the parties are spending time on.

Anna:

And sticking with the theme of disclosure, Tim, I don't know if you want to talk about some of the CAT's decisions in relation to what is and isn't permissible in terms of seeking disclosure from class members. There've been a couple of interesting bits of commentary from the CAT on that, some of which maybe was a little bit surprising.

Tim:

Yeah. So, obviously, it was last year, so if we are focusing on developments this year, just a reminder of what happened last year in the McLaren case with the communication between the proposed defendants and class members in terms of the documents and data that their experts were going to need and the fact that the letters referred to applications. And I think it's fair to say that when the CAT was informed of this, it didn't like that very much and it said that it fell foul of what it held was an inherent restriction in the CAT rules in terms of communicating with class members. And in a nutshell, the restriction is that you're not able to communicate with class members about matters that concern the proposed proceedings. Now obviously the question arises, well what does that mean? And the parties in CICC grappled with that very issue. And I think in particular in the fact of that case, they were the recipients of communications about settling related proceedings or whether there was an overlap in the causes of action, and they did what the Tribunal thought was the right thing and come to them and say, "Well, we've received these. We think that these possibly concern the proposed proceedings, what should we do about it?" And the Tribunal in CICC built on the reasoning in McLaren and explained what that meant. That is some useful guidance, but it's really in the context of settlement and with regard to a couple of particular rules in the CAT Rules. But it does really leave open the question more broadly for what proposed defendants should do, particularly when they're trying to communicate with their customer base. So, there's a lot for parties to grapple with there. But on the disclosure piece, because as I say, the experts didn't in McLaren, don't have the data and neither party has it they're having to resort to getting it from either class members or non-parties. The defendants approached the Tribunal and said that we want to write to large fleet operators. And there was a hearing on that not that long ago. But the CAT didn't give the permission to write the letter in the form that the defendants wanted to. The defendants had alluded to the fact that they may, if the large fleet operators didn't want to give the documents and data that were being sought, that they may seek an application. I think they went out of their way to say, "Well, this is no indication whether the tribunal is actually going to grant the application or not." But that the CAT didn't much like that. They felt that that was putting the cart before the horse, and they felt that the indirect reference of possible application from class members was not the appropriate course. So again, a pretty interventionist approach with the Tribunal very closely supervising what's going on with disclosure and how communications with class members should take place.

And Anna, I think you mentioned to me recently that might not be the final word on that and there's something to look out for in terms of guidance, in respect of judicial review, is that right?

Anna:

Yes. So, there was recently an appeal against the original CAT decision in relation to whether those original July letters sent out were permissible or not. So, I think we may yet hear something from the Court of Appeal on that. So, I think it's a question of watch this space and that may be something that we end up revisiting during the course of next year.

Another point on case management, Max, I think it would be interesting to hear about how the CAT has been managing cases where there are both collective and sort of the normal individual claims that are being brought against certain cartelists. So, I think we've seen that in Power Cables, we've seen it in maritime car carriers, Ro-Ro, and we've seen it in interchange as well. Do you want to say something about how the CAT is looking at dealing with those types of claims?

Max:

Yes. And we can start with Interchange where the CAT's managing the Merricks collective alongside what we call the Umbrella Proceedings, which are over 100 separate merchant claims that are being managed together. There's going to be a three-stage trial in those dealing first with some residual liability issues in February 2024, then pass-on in late 2024, and then a sweep-up trial at some later stage that hasn't been scheduled yet, I think. Then there's Power Cables, as you said, where the CAT's beginning to case manage the Spottsiwoode CPO application that's due to be heard in April 2024 with the London Array individual claim that's been set down for trial in April 2025. And they had a CMC back in June where the CAT essentially said that it wanted to deal with any common issues between the two claims. And so, it increased the trial listing from four to six weeks to accommodate Spottiswoode if it's certified. And that'll be a challenge if they want to keep the listing because Spottiswoode would essentially have to go from CPO to trial in about a year.

And then you've got Maritime Shipping where the Mark McLaren collective is being broadly case managed alongside the Volkswagen individual claim. The McLaren claim has been set down for a ten-week trial in early 2025, and I think the whole Hilary Term, so essentially Q1, 2025 has been reserved for the trial of any common issues between McLaren and Volkswagen. And then comes the Volkswagen trial, that's due to happen in the first quarter of 2026. And when you step back from all that, you can see the CAT's doing its best to be efficient and consistent. It'll still be acutely aware of the inconsistent judgments between it and the High Court in the early Interchange claims. So, it'll be doing what it can to stop that from happening again. But it's a tough balance to achieve, particularly with such a full docket. Clearly there's a need for consistency and that won't be without difficulty. There's the challenge of having one claim catching up with another one, and the tricky situation of having to rush one or delay another, and neither of which is particularly desirable if you take it too far. And then what happens if the parties simply need more time, as they often do? These are some pretty big listings which the CAT will not want to derail. So, it'll be hugely important for all the steps to be realistic. Otherwise, there's got to be a risk of paralysis. You've got these all singing, all dancing monoliths being created in the hope that all the claims in one area can be dealt with in one fell swoop, and that'll be great if it all goes to plan. So, I think it's going to be really interesting to see how it all develops.

Anna:

And then looking at trials, the Le Patourel v BT case, which I think is coming up for a trial in January next year. Max, there's some split trials that have been ordered this year haven't there not to take place this year, but that have been ordered this year to take place in the next year or two in some of these cases. So that's been one way that the CAT's been case managing these.

Max:

Yeah. Definitely. And the rail cases spring to mind. You've got the three collective claims that were brought by Justin Gutmann against the rail companies, which are all about the level of train fares. And there again, yeah, the CAT's ordered a split trial, one for three weeks in June 2024 on abuse of dominance, and then another one for two to three weeks in June 2025 on quantum. And what's interesting there is that Mr. Justice Roth, who of course is the previous President of the CAT, said that, "Most collective claims settle" and that doing it this way could facilitate a settlement. And you can see the thinking there. You've got a threshold issue being dealt with upfront and then a year for the parties to take stock while preparing for the next trial. And some might wonder why the CAT didn't just push the parties to get it all done next summer and free up some time.

And first, there's the question as to whether that was even possible, and the rail companies certainly said that it wasn't. The alternative on the table was to have a single trial in the summer of 2025, and there was some consensus that this would save costs in comparison with a split trial, which the CAT actually acknowledged. So, you might say that the CAT's making a bit of a bet that this will all settle and narrow significantly next summer so that it can free up some time on its docket without having driven up costs in doing so.

Anna:

And certainly, that's I think indicative or representative rather of the approach that the CAT's taken in other cases to try and manage them in ways that will promote settlement, isn't it? I mean, we're familiar from our own experience with the way the Trucks claims were managed, the not collective proceedings, but trying to have listing a trial one, trial two and trial three different of different claims to promote settlement, which seems to be largely working because trial one took place and led to the judgment in Royal Mail that's been much talked about, but it isn't a collective judgment , so we won't address it here. And then that prompted settlement in trial two and trial three looks also like it may be settling. So, this is obviously something the CAT is focused on achieving.

Max:

Yeah. Absolutely. Absolutely. And I guess when the bet turns out to be a good one, you can see why it all makes complete sense. And you might say that more often than not, it probably does work, and the CAT does these things deliberately to force parties to get on with it and settle minds in a particular direction. But of course, if it doesn't result in settlement, it can become a bit of a mess, I guess.

Tim:

Anna, it's interesting that you just said, "Not referring to the Trucks decision." I think we're coming to each of our takes on the year's most striking development. I mean, I was actually going to be slightly contrarian and pick that development - admittedly not a collective action - because I think it is a really significant one. I think it's going to be relevant to collective actions in particular how the Tribunal in the Royal Mail v BT judgment that came out in February did approach the issue of expert evidence. And I think the comments in the judgment are going to have quite far-reaching implications for parties, including all expert economists acting in collective actions. And in a nutshell, there were concerns with one of the experts in Trucks that led to an adverse finding and drew critical remarks about the approach taken. Derek Ridyard was the economist on the panel, and he made a, I thought was a very interesting keynote address at a conference a couple of months ago reflecting on the role of economists in expert evidence. And without going into lots of detail as what he said, a couple of takeaways I think that were particularly interesting. One was his emphasis on encouraging experts to step outside the bubble and to think about the bad reports that that could be written. Or another way of thinking about it is the other report that you could write. And his point was, "Look, you're going to be confronted with this. That's what your opponent's going to do. So, you might as well think about that now." And also, just address head on the contradictions with the factual evidence and the tensions with that factual evidence. The court's going to have to do that, so the experts might as well do that beforehand. Both can't be right and all of that sort of wrapped together with making good the duty to assist the court. So those are all, I think, pretty sound bits of advice and I think that that is quite a striking development for the collective actions regime because as we see more of these cases move post-certification, I think parties are going to be pretty well advised to note that guidance and learn the lessons from how the expert economists fared in Trucks. So that's my slightly contrarian development.

What about yours, Anna?

Anna:

So, I think some really big news for the collective actions regime as well as the broader litigation funding area and litigants impacted by funding was the Supreme Court's judgment in PACCAR, which was handed down again at the end of July this year. And that's been the subject of a separate podcast that we've done and also a few briefings, so, we'll put some links to those in. But in short, and for the purposes of the implications for the competition collective actions regime, specifically what the judgment did was it held that funders can't take a percentage of the damages as their return on investment for funding these opt-out collective actions cases because that amounts to a DBA (damages based agreement) and it's prohibited. And that was, I think, generally seen as a bit of a surprise. Funders are seen as integral to the collective actions regime because without them, the funds won't be available to bring these cases. So, I think they are seen as an accepted part of the furniture. I think what this judgment did in saying that the funders can't take a percent of the damages left funders in a position where they are able to take a multiple of their funds invested or committed as their return on investment, but that they're not able to take a percent of damages. So, the result of all of that, I think as a result of PACCAR for the collective actions regime has been that many, most, perhaps even all funding agreements have had to be reworked to make them compliant with that judgment . And I think we've seen a lot of that going on mostly behind the scenes in the last few months since the judgment was handed down in July.

For the cases that have been progressing towards trial, I think we haven't seen these being recalled into the CAT over insuperable difficulties in the funding renegotiations. And that's probably not surprising because funders have had quite a lot of skin in the game by then, they'll have invested quite a lot into those cases. So, I think they'll have an interest in renegotiating those with their class representatives. But for the cases that have been around the certification stage, I think there have been some tussles; we've already mentioned the Apple battery life case, which has been certified, but subject to the funding arrangements being amended. And we've seen other cases in particular in Sony and the CICC case where the respondents to those CPO applications have tried to challenge elements of the funders' return again using the PACCAR judgment . So, I think we've seen that a number of cases are having to be back in the CAT or appear in the CAT to have their funding arrangements looked at. And I think to that extent, it has thrown a bit of a spanner in the works. There we are legislative amendments going through in the Digital Markets Competition and Consumers Bill at the moment that are seeking to address the Supreme Court's judgment in PACCAR. So, this certainly isn't the end of the road for the funding matters, but I think that has been a significant development in the second half of this year and something that we'll probably have more to watch in 2024 and beyond. Max, what's your most striking development of this year, do you think?

Max:

Well, I'm going to cheat a little bit and go for a general feature of the regime rather than a specific development. And that's the fact that the overwhelming majority of class actions before the CAT, two thirds, as I said earlier, are standalone abuse of dominance claims, about half of those are against Big Tech. Now, when the regime was first created in 2015, I think most people would've expected it to mirror the shape of competition litigation at the time, which is to say a prevalence of follow-on claims arising from cartel decisions. But that's not what we're seeing. Instead, we're seeing claimant classes being more creative looking at regulatory activity that's brewing in the UK or the EU or more advanced investigations in the US or even just press coverage on conduct that might give rise to a claim. And this is all we made easier by the Supreme Court in Merricks, which was the real trigger moment for the regime. And although you might say that some of the more recent judgments have slightly reined that in, claimants haven't been put off and are still having a go. So that would be mine.

Tim:

All three of those I would've thought will be issues to look out for next year. That's all we've got time for though in this episode. Thank you for listening. Please do check out our other episodes in the series. We would welcome any feedback or questions, so please do get in touch with any of us. Our details are on the website to ensure you don't miss out on any future episodes. Do subscribe now on Apple Podcasts, Spotify or your favourite podcast platform. While you're there, please feel free to keep the conversation going and leave us a rating or review. Until then, many thanks for listening.