DSG Retail Ltd v Mastercard Incorporated & Ors

Under rule 31(4) of the Competition Appeal Tribunal Rules 2003, a follow-on competition claim is barred to the extent that the corresponding court claim was already time-barred when section 47A of the Competition Act 1998 commenced.

For section 32(1)(b) of the Limitation Act 1980, reasonable diligence is objective but not purely hypothetical. Something must objectively put the claimant on notice of a need to investigate. Whether that occurred, and what the claimant could then have discovered, may require disclosure and evidence.

Additional loss flowing through a different causal route does not create a distinct cause of action. Facts relevant only to the scale or mechanism of loss do not postpone limitation once the essential cause of action was discoverable.

The claimants brought follow-on competition proceedings before the Competition Appeal Tribunal, seeking damages resulting from interchange-fee arrangements found by the European Commission to infringe article 101. Mastercard sought summary judgment in respect of losses incurred before 20 June 1997.

The Tribunal held that rule 31(4) of the Competition Appeal Tribunal Rules 2003 did not bar the early claims. It also gave alternative conclusions under section 32(1)(b) of the Limitation Act 1980. It considered the cross-border claims discoverable with reasonable diligence, but treated the domestic claims as a distinct cause of action whose material facts were not discoverable.

Mastercard appealed. The claimants relied on a respondents’ notice challenging the Tribunal’s approach to reasonable diligence and its summary determination of discoverability. The central questions concerned rule 31(4), the need for an objective trigger to investigate, and whether domestic losses constituted a distinct cause of action.

1. Appeal allowed, but Mastercard’s summary judgment application dismissed. Rule 31(4) of the Competition Appeal Tribunal Rules 2003 preserved limitation defences which had accrued before section 47A of the Competition Act 1998 commenced. Its reference to proceedings meant proceedings in respect of the particular damages claims to which the rule applied. It did not permit an entire continuing infringement to be claimed merely because some later losses remained in time. The pre-20 June 1997 claims were therefore prima facie time-barred: paras 53–61, 107.

2. Section 32(1)(b) of the Limitation Act 1980 does not impose a purely hypothetical inquiry conducted on an assumption that the claimant was already on notice. There must objectively have been something which put the claimant on notice of a need to investigate. The reasonable-diligence inquiry then assumes a desire to investigate that matter. Although the standard is objective, the claimant’s actual position may affect what diligence could reasonably have been expected: paras 63–71.

3. The Tribunal could not determine discoverability merely by identifying public documents which, collectively, contained facts capable of supporting a statement of claim. It first had to decide whether the claimants were objectively on notice and whether those particular materials could reasonably have been discovered. Those fact-sensitive questions required disclosure and evidence. The limitation position for the cross-border claims therefore had to be tried: paras 72–77, 108.

4. A claimant alleging an article 101 infringement need not initially plead facts negativing objective necessity. The undertaking must first plead the factual basis on which it contends that an apparently anti-competitive arrangement was objectively necessary: paras 78–80.

5. The Domestic Fallback Rule and the de facto adoption of the EEA interchange fee affected the causal route and scale of domestic losses. They were not essential elements of a distinct follow-on cause of action. The cause of action was complete once the infringement identified by the Commission decision and some resulting loss were established. The domestic claims therefore stand or fall with the cross-border claims for the purposes of section 32(1)(b): paras 83–99, 109.

6. The Tribunal’s errors concerning the trigger, reasonable diligence and summary determination were errors of law appealable under section 49(1A)(a) of the Competition Act 1998: paras 100–104. Flaux and Newey LJJ agreed with Sir Geoffrey Vos.

1. Court of Appeal (Civil Division): Mastercard’s appeal was allowed. The Competition Appeal Tribunal’s conclusions on rule 31(4), reasonable diligence and the domestic cause of action were set aside. Mastercard’s summary judgment application was nevertheless dismissed because the section 32(1)(b) issues required trial: [2020] EWCA Civ 671.

2. Competition Appeal Tribunal: The Tribunal held that the pre-20 June 1997 claims were not barred by rule 31(4). Its alternative reasoning treated the cross-border claims as discoverable with reasonable diligence but the domestic claims as a distinct cause of action protected by section 32(1)(b). No citation is stated in the judgment.