Royal Mail Group Limited v DAF Trucks Limited & Ors

Once a claimant proves substantial loss from a competition-law infringement on the balance of probabilities, the court must quantify that loss as best it can. The broad axe permits informed evaluation of imperfect evidence and counterfactuals. It does not remove the claimant’s initial burden.

A defendant alleging supply pass-on must prove that the overcharge caused higher downstream prices. Ordinary budgeting or cost-recovery processes alone are insufficient. Knowledge, relative size, the relationship between the relevant input and downstream product, and identifiable downstream claims are potentially relevant but non-exhaustive factors.

A tribunal may draw adverse inferences where a cartelist withholds available evidence about the cartel’s operation. It may also infer financing loss from evidence of the claimant’s actual investment and borrowing practices.

The European Commission found that truck manufacturers, including DAF, had participated in a pricing cartel infringing Article 101 of the Treaty on the Functioning of the European Union and Article 53 of the EEA Agreement. Royal Mail and companies in the BT Group brought follow-on damages claims.

The Competition Appeal Tribunal found a 5% overcharge, included factory-fitted truck bodies in the relevant value of commerce, rejected DAF’s supply pass-on case, and awarded Royal Mail financing losses by reference to compound interest. DAF appealed on four grounds concerning proof and quantification of the overcharge, supply pass-on, truck bodies, and financing losses.

The central questions were whether the Tribunal had misused the broad axe, applied the wrong causation test to pass-on, misconstrued the Commission decision, or adopted an irrational financing-loss counterfactual.

1. The appeal was dismissed on all grounds. The Tribunal had expressly required the claimants to prove monetary harm on the balance of probabilities. It was entitled to infer a substantial overcharge from the long-running cartel, the infringement by object, DAF’s admissions, and DAF’s failure to adduce evidence explaining the cartel’s operation or benefits. Once substantial loss was established, the claimants were entitled to have it quantified. The broad axe was properly used to assess a 5% overcharge from imperfect regression evidence and the wider factual context: [2024] EWCA Civ 181, paras 139–148.

2. DAF bore the burden of proving supply pass-on. It had to establish that the overcharge caused the claimants’ downstream prices to be higher than they would have been in the counterfactual. This required a direct and proximate causative link, not merely evidence that the cost entered an ordinary budgeting or price-setting process. Knowledge, relative size, the relationship between the input and downstream product, and identifiable downstream claims were relevant, non-exhaustive considerations. None was present, and the Tribunal rationally found that DAF’s evidence did not bridge the causal gap: paras 149–156.

3. Truck bodies supplied with Royal Mail’s completed trucks fell within the Commission decision. They were factory-fitted or available options even where manufactured by third parties. The infringement evidence encompassed the whole truck, and DAF had produced no evidence showing that bodies were excluded: paras 157–158.

4. The Tribunal rationally inferred how Royal Mail would have deployed the money used to pay the overcharge. Evidence showed that it was a net investor before 2008 and a net borrower afterwards. The Tribunal could therefore prefer a two-period approach, using investment returns in the first period and debt costs in the second, when assessing compound financing loss: paras 159–163.

5. Green LJ added that competition cases should be managed to expose the operation of a cartel and the basis of expert opinions. Experts must disclose relationships affecting independence, seek relevant factual material, modify opinions when the evidence requires it, and comply fully with their duty to assist the Tribunal. Failure to disclose cartel evidence may justify adverse inferences: paras 166–177.

1. Court of Appeal (Civil Division): In [2024] EWCA Civ 181 , unanimously dismissed DAF’s appeal on all four grounds and affirmed the Competition Appeal Tribunal’s assessment.
2. Competition Appeal Tribunal: By judgment dated 7 February 2023, assessed the overcharge at 5%, included truck bodies, rejected supply pass-on by a majority, and awarded Royal Mail compound financing losses. Orders were made on 3 March 2023. The Tribunal granted permission to appeal on supply pass-on on 16 May 2023; the Court of Appeal granted permission on the remaining grounds on 11 July 2023.