Attheraces Ltd & Anor v The British Horseracing Board Ltd & Anor

On an application to strike out or obtain summary judgment in a complex competition claim, the court should avoid conducting a mini-trial. The claim should proceed where substantial factual or legal issues require determination at trial and it cannot be said that there are no reasonable grounds or no real prospect of success.

For unfair pricing under Competition Act 1998, excessive pricing is ordinarily the essential first step. A comparison between cost and price may therefore be relevant, but excessive or high prices alone do not establish unfairness. The court must then assess whether the price is unfair in the relevant market and circumstances.

An interim injunction may be granted where the claim is seriously arguable, damages would not adequately compensate for interruption of supply, and the balance of convenience favours preserving the status quo, subject to appropriate payment or security.

Attheraces Ltd and Attheraces (UK) Ltd claimed that The British Horseracing Board Ltd and BHB Enterprises plc had abused a dominant position contrary to s.18 of the Competition Act 1998 and Article 82 of the EC Treaty.

The defendants threatened to cause authorised suppliers to stop supplying pre-race horseracing data unless Attheraces entered into data-licensing arrangements and made payments. Attheraces sought declarations, injunctive relief and permission to amend its particulars of claim. The defendants applied to strike out or summarily dismiss the competition claim, relying principally on BHB Enterprises plc v Victor Chandler (International) Ltd [2005] EWHC 1074 (Ch).

The court had to decide whether the competition claim was sufficiently arguable, whether interim protection should be granted, and whether the pleading should be amended.

1. Strike-out and summary judgment. The defendants’ application was dismissed. The applicable questions were whether the claim had no reasonable grounds, no real prospect of success, or whether there was another compelling reason to dispose of it without trial. Following Three Rivers DC v Bank of England (No 3) [2003] 2 AC 1, the court had to have regard to the overriding objective and avoid a mini-trial. The alleged dominance, abuse and effect on trade involved substantial and complex issues of fact and law.
2. Unfair pricing. The statutory elements included dominance, abuse and absence of objective justification. United Brands v Commission [1978] ECR 207 showed that, in normal cases, comparison between the cost of production and the price charged was an essential first step in establishing excessive pricing. That comparison did not itself establish unfairness. High prices or high margins were insufficient without further assessment of unfairness.
3. Victor Chandler. The earlier decision was distinguishable because the present pleading alleged wider forms of abuse and gave materially more detailed particulars of unfair and excessive pricing. To the extent that the earlier judgment treated a cost-price comparison as irrelevant, the court disagreed with it. It therefore was not determinative of the application.
4. Objective justification. At trial, the defendants could not assume that interruption of supply was justified merely because Attheraces had not made direct payments to them. Attheraces paid substantial sums to PA for data, and PA’s contractual obligation to account to BHB only after covering its costs did not remove the value of those payments. The absence of database rights was also relevant to the asserted justification.
5. Interim injunction. The injunctions were granted pending judgment or further order. The threatened interruption would seriously affect Attheraces’ business and could not adequately be compensated in damages. The balance of convenience and preservation of the status quo favoured relief. Attheraces was required to pay the specified sums into court or a joint solicitors’ account rather than directly to BHB.
6. Permission was granted to amend the particulars of claim, and directions were given for a speedy trial.