MOL (Europe Africa) Ltd and others v Mark McLaren Class Representatives Ltd

The Court of Appeal considered appeals from a Competition Appeal Tribunal decision granting a Collective Proceedings Order (CPO) for follow-on damages claims under section 47A of the Competition Act 1998, based on a European Commission infringement decision under Article 101 TFEU / Article 53 AEEA. The central legal issues were the adequacy of the class representative's methodology for proving aggregate loss on a class-wide basis and the legal treatment of apparent benefits obtained by class members (the causation/pass-on issue).

The court upheld the Tribunal's provisional finding that a "silo" pricing theory (separate delivery charges) was a plausible basis for establishing pass-on to end consumers and rejected applications to strike out the collective claim. The court held that the Tribunal had erred by prematurely deciding the legal effect of certain causation arguments (paras [121]–[124] of the Tribunal judgment) and therefore set those paragraphs aside. The Court remitted the case to the Tribunal for further case management directed at clarifying how the silo and "overall pricing" theories should be addressed before significant trial preparation continues.

The court dismissed the appellants' further challenges to certification of the methodology and dismissed the class representative's cross-appeal concerning inclusion of beneficiaries who died before the claim form was issued.

Background and parties: The proceedings were follow-on collective claims under section 47A of the Competition Act 1998 brought by a company incorporated to act as class representative on behalf of purchasers of new motor vehicles. Liability for an infringement of Article 101 TFEU / Article 53 AEEA during 18 October 2006 to 6 September 2012 had been established by a European Commission decision adopted 21 February 2018. The Tribunal made a CPO on 18 February 2022. The defendants (the carriers) appealed and sought strike out/reverse summary judgment.

Nature of application: Certification for collective proceedings under section 47B/47C CA 1998; a methodology for proving aggregate damages on a class-wide basis was presented. The class representative sought aggregate damages for alleged pass-on of a shipping overcharge incorporated into delivery charges. Defendants challenged the methodology and argued that "overall pricing" (a single composite vehicle price) defeated a silo approach and that, as a matter of law, benefits negotiated by purchasers should reduce recoverable loss.

Issues framed:

• Whether the Tribunal erred as a matter of law by certifying a methodology that focused on delivery charges ("silo pricing") without addressing an alternative "overall pricing" counterfactual.
• Whether benefits obtained downstream (negotiated discounts on the overall vehicle price) should be set off against damages for the shipping overcharge; the relevance of Fulton and Sainsbury's.
• Whether the Tribunal should have required more methodological detail to meet the Microsoft test for aggregate proceedings.
• Whether personal representatives of claimants who died before proceedings were issued could be included in the class.

Reasoning and conclusions: The Court of Appeal held that the Tribunal was entitled at the certification stage to conclude that the silo pricing theory was plausible on the evidence before it and that the proposed methodology met the threshold of a "realistic prospect" of assessing loss class-wide. The Court rejected the contention that the fungibility of money or the existence of a single overall price made the silo approach legally impossible; that was a factual counterfactual to be determined at trial. The court explained that aggregate damages under section 47C CA 1998 require pragmatic, often top-down approaches and that some class members may ultimately show no loss without fatal consequence to a certified aggregate claim.

However, the Tribunal had gone too far in relation to the causation/pass-on point by deciding at certification (paras [121]–[124]) that benefits from negotiation of overall price were irrelevant; that was a merits finding and premature. The Court therefore set those paragraphs aside and remitted the matter to the Tribunal to perform a more proactive gatekeeper/case-management role to address how the competing pricing theories should be litigated and what disclosure and evidential steps should occur before trial.

The Court dismissed the KK appellant's challenges to the methodology as too demanding of the Tribunal at certification, and it dismissed the class representative's cross-appeal seeking inclusion of persons who died before the claim form was issued, holding that Rule 38 of the Tribunal Rules did not permit substitution in those circumstances.

Appeal allowed in part. The Court refused the strike out/summary dismissal sought by the appellants and upheld the Tribunal's certification of the proposed aggregate damages methodology as having a realistic prospect of assessing loss on a class-wide basis, while identifying error in the Tribunal's early determination on causation (paras [121]–[124]) and setting those paragraphs aside. The Court remitted the case to the Competition Appeal Tribunal to carry out further case management focused on the competing "silo" and "overall pricing" theories. Appeals challenging certification otherwise were dismissed and the cross-appeal on inclusion of deceased persons who died before the claim form was issued was dismissed.

Appeal from the Competition Appeal Tribunal judgment of 18 February 2022 (collective proceedings order) (referred to in the judgment as [2022] CAT 10; cover sheet also records [2022] CAT 18). The Court of Appeal delivered a unanimous judgment on 21 December 2022 ([2022] EWCA Civ 1701).