Courage Ltd v Crehan

A party to an anti-competitive agreement may have an Article 85 claim where it was not significantly responsible for the distortion of competition, subject to proving the underlying facts. A court may refuse to split a long-running competition claim into further preliminary issues where an exemption issue was raised late and causation would require substantial fact-finding. In such circumstances, the proper course may be to direct an early trial of the remaining issues. Where a counterclaim remains unresolved pending a reference, an appeal costs order should not be treated as disposing of its costs. Costs may be apportioned by reference to the issues actually won and lost.

Courage Ltd brought proceedings concerning beer ties, and Mr Crehan counterclaimed for infringement of Article 85. Mr Justice Carnwath had given judgment for Courage and dismissed the counterclaim. The Court of Appeal had referred questions to the European Court of Justice. After receiving the answers, it considered whether to order preliminary trials on the applicability of the block exemption in EC Regulation 1984/83 and on causation. It also considered the effect of an earlier costs order, the costs of the reference, and the costs before the High Court. The central issues were whether the counterclaim could proceed, whether further preliminary issues would promote efficient resolution, and how costs should be allocated.

The Vice-Chancellor delivered the judgment. Lord Justice Schiemann and Lord Justice Mance agreed, making the decision unanimous.

1. The answers of the European Court of Justice meant that Mr Crehan could pursue a cause of action for infringement of Article 85 despite being a party to the beer-tie agreement, provided that he proved the underlying facts and did not bear significant responsibility for the distortion of competition. The dismissal of the counterclaim in the order of Mr Justice Carnwath therefore had to be set aside.
2. The court refused to order preliminary trials on the block exemption and causation. The exemption issue had been raised too late, after the litigation had already been running for eight years and four years had passed since it could have been raised. The causation issue was unsuitable for preliminary determination because it involved substantial questions of fact. The court directed that the action or remaining issues proceed to trial as soon as reasonably possible.
3. The earlier Court of Appeal costs order was intended to cover the appeal relating to the claim, not the unresolved counterclaim. It was therefore open to the court to determine the costs of the counterclaim, the reference, and the proceedings before Mr Justice Carnwath.
4. Crehan was awarded the costs of the counterclaim in the Court of Appeal and before Mr Justice Carnwath, together with the costs of the European Court of Justice reference, on which he had been wholly successful. Costs relating to issues incorporated into the defence to Courage's claim remained within the existing claim costs order because Crehan had lost those issues. The court also recorded the order under section 18 of the Legal Aid Act 1988 that provision for Court of Appeal costs should be made from public funds and that Crehan should have no liability for them.

The counterclaim was remitted to a designated High Court judge. There was a payment on account of £100,000, today's costs were to be costs in the counterclaim, and Crehan's costs were subject to legal aid assessment.

• Court of Appeal (Civil Division) — In [2001] EWCA Civ 1930, after receiving answers to its European Court of Justice reference, the court set aside the dismissal of the counterclaim, refused further preliminary issues, determined costs, and remitted the counterclaim.
• High Court — Mr Justice Carnwath had given judgment for Courage, dismissed Mr Crehan's counterclaim, and made an order for costs against him.