Sainsbury's Supermarkets Ltd v Mastercard Incorporated & Ors

When deciding whether to try an issue as a preliminary issue, the court must balance all relevant factors and ask whether the procedure will further the overriding objective. A preliminary issue should not be ordered where its scope is likely to require substantial factual or expert evidence, create delay, or leave significant aspects of the claim for trial. The possibility that a later decision may make the issue unnecessary is also material. For disclosure, documents supplied to competition authorities remain subject to ordinary relevance principles, although caution is required before treating pre-existing documents as irrelevant. Documents created specifically for an investigation may require separate consideration, including representations from the relevant authority before inspection is ordered.

The claimant brought competition-law proceedings concerning the alleged unlawfulness of MasterCard's UK multilateral interchange fee. It sought damages, exemplary damages, interest and declaratory relief. The defendants applied for the question whether the claim was barred by ex turpi causa to be tried as a preliminary issue, relying on the claimant's relationship with Sainsbury's Bank and participation in the MasterCard scheme.

The claimant also sought specific disclosure and related directions. The court had to decide whether to order the proposed preliminary trial and how to structure disclosure of documents relating to the European Commission and Office of Fair Trading investigations.

1. Preliminary issue. The application was refused. The court applied the factors identified in Steele v Steele [2001] NPC 141, including the potential to dispose of the claim, savings in time and costs, the factual basis required, the risk of delay or duplication, and whether it was just to order the issue.
2. The proposed issue was unsuitable for preliminary determination. Success might not dispose of the claim because declaratory relief concerning the future lawfulness of the UK MIF could remain. The issue might also be rendered unnecessary by the pending Court of Justice appeal. The court was not persuaded that the issue could be tried in two days.
3. The question whether the claimant, its holding company and Sainsbury's Bank formed a single economic entity could require broader evidence concerning each company's ability independently to determine its market conduct. The court referred to Aristrain v Commission C-196/99 and [2003] ECR 1-11049.
4. The proposed ex turpi causa issue also raised the question whether Sainsbury's Bank bore significant responsibility for the infringement. Courage v Crehan C-453/99 and [2001] ECR 1-6297 indicated that relevant matters included the parties' economic and legal context, bargaining power, conduct, and ability to avoid or reduce loss. Those matters could require substantial factual and expert evidence.
5. Disclosure. Pre-existing documents disclosed to the Commission or the Office of Fair Trading were to fall within standard disclosure, subject to relevance under CPR 31.6. The court cautioned that it might be difficult to conclude that such documents were irrelevant. A disclosure search extending back to May 2006 was proportionate, while leaving open a later application for further disclosure.
6. Documents created specifically for the investigations, and the confidential version of the Commission's decision, were to be dealt with separately. In light of the approach in Pfleiderer AG v Bundeskartellamt C-360/09, and the pending representations from the competition authorities, the court preferred the defendants' draft arrangement and declined to order immediate inspection.

Not stated in the judgment.