Paccar Inc & others v Road Haulage Association Ltd

The court considered (1) whether it had jurisdiction under section 49 of the Competition Act 1998 to hear an appeal from the Competition Appeal Tribunal's decision on a preliminary funding issue, and (2) whether third‑party litigation funding agreements under which the funder is paid a share of recoveries (but plays no part in managing the claim) are "damages‑based agreements" (DBAs) within the meaning of section 58AA of the Courts and Legal Services Act 1990 and thus subject to the Damages‑Based Agreements Regulations 2013. The court held that it lacked jurisdiction to grant permission to appeal the Tribunal's decision on the DBA point and accordingly dismissed the application for permission to appeal. On the substantive construction point the court agreed with the Tribunal that the statutory phrase "claims management services" (Compensation Act 2006, s.4(2)) should be read as referring to services in the context of management of claims, and that pure third‑party funding (where the funder does not manage the claim) does not fall within the DBA definition in s.58AA. The court refused to permit a late factual challenge about the funder's insurance arrangements and dismissed the related judicial review ground.

This case concerned two interlinked issues arising from applications for Collective Proceedings Orders under section 47B of the Competition Act 1998 in respect of claims arising from the EC Trucks decision. The applicants for certification were UK Trucks Claim Limited and the Road Haulage Association; the objector/appellant was DAF and other OEMs were interested parties. The Competition Appeal Tribunal had heard a preliminary issue and held that typical third‑party litigation funding agreements (LFAs) providing a share of recoveries to funders were not DBAs within section 58AA of the Courts and Legal Services Act 1990 and that the applicants could be authorised as class representatives subject to conditions; its conclusions appear at [2019] CAT 26 and the PTA gave a further ruling at [2019] CAT 28.

Nature of the proceedings: DAF sought permission to appeal the Tribunal’s ruling to the Court of Appeal (or alternatively permission to bring judicial review proceedings), challenging (i) the availability of a right of appeal under section 49 CA against the Tribunal’s decision on the funding point and (ii) the Tribunal’s construction of the definition of a damages‑based agreement in s.58AA CLSA 1990, premised on the meaning of "claims management services" in the Compensation Act 2006 (and subsequently FSMA s.419A).

Issues framed by the court:

• Jurisdiction: whether section 49 of the Competition Act 1998 permits an appeal to the Court of Appeal on a point of law arising from a Tribunal decision concerning authorisation of a class representative and related approval of funding arrangements;
• Substantive construction: whether a pure funding agreement under which remuneration is a share of damages but the funder plays no role in managing the claim is a DBA because the provision of financial assistance is, by s.4(3)(a)(i) of the Compensation Act 2006, included within the meaning of "claims management services";
• Factual application: whether UKTC’s funder Yarcombe’s insurance and related arrangements meant that in fact the funder was engaged in claims management so as to bring the agreement within the DBA definition.

Court’s reasoning (concise): On jurisdiction the court concluded that the Tribunal was correct to hold it had no jurisdiction to grant permission to appeal under section 49(1A) in the specific circumstances of this case: a determination that the particular LFAs were DBAs would not necessarily have been the end of the road for the collective proceedings because alternative funding arrangements or amended terms could have been proposed. On construction, applying purposive statutory interpretation and the context and legislative history, the court accepted the Tribunal’s view that the definition of "claims management services" should be read as relating to the management of claims and that Parliament had not intended to capture pure third‑party funding arrangements by the 2006 Act; to do so would be anomalous and overlap with the specific LFA provisions in earlier legislation (section 28 AJA 1999 / s.58B CLSA 1990) which remained on the statute book. On the late factual argument about Yarcombe’s insurance and role, the court declined to permit a fresh issue to be raised; there was no merit to it on the material before the court.

Subsidiary findings: the court emphasised the distinction between funding and claims management (referring to Meadowside as an example where the funder did manage the claim and so fell within s.58AA), and applied the presumption against absurdity in construing the 2006 Act to avoid capturing commonplace commercial lending or insurance arrangements that Parliament had not intended to regulate as claims management.

The Court of Appeal dismissed DAF’s application for permission to appeal for lack of jurisdiction under section 49 CA. Sitting also as a Divisional Court, it granted permission to apply for judicial review on the principal construction ground but dismissed that challenge on the merits: the Tribunal was correct to conclude that typical third‑party litigation funding agreements in which the funder does not manage the claim are not DBAs within s.58AA CLSA 1990 because the phrase "claims management services" is to be read as referring to activities in the context of the management of a claim. A late factual challenge about the funder’s insurance arrangements was refused and dismissed as without merit.

Appeal from the Competition Appeal Tribunal (preliminary rulings reported at [2019] CAT 26 and [2019] CAT 28). DAF sought permission to appeal to the Court of Appeal under section 49 Competition Act 1998 and, alternatively, permission to bring judicial review proceedings in the Administrative Court (High Court claim CO/160/2020). The Court of Appeal (also sitting as a Divisional Court) dismissed the application for permission to appeal for lack of jurisdiction and, having entertained the parallel judicial review application, refused relief on the substantive challenge to the Tribunal’s construction of DBAs.