Kington SARL v Thames Water Utilities Holdings Limited

Expert evidence must be restricted to evidence reasonably required to resolve the proceedings. The court must first ask whether the evidence is necessary. If it is not necessary, the court must assess whether it will assist, balancing relevance and probative value against proportionality, fairness, delay and the overriding objective.

Competition litigation does not create a special rule requiring economic expert evidence. Expert evidence should provide focused economic opinion directly applicable to the facts. It should not reproduce legal submissions from an economic perspective or rely on tentative, speculative and incomplete analysis. In urgent restructuring-plan proceedings, the likely disruption to the timetable and prejudice to other parties may justify refusing permission.

Kington, a junior creditor, sought permission to rely on a competition economist’s draft report in opposing a restructuring plan proposed by Thames Water Utilities Holdings Limited. The proposed evidence concerned alleged infringements of the Chapter I and Chapter II prohibitions in the Competition Act 1998 arising from a June Release Condition in the plan.

The application was made shortly before the sanction hearing, within a tightly managed restructuring process. Kington argued that the evidence was necessary or would assist the court on market definition, competition effects, market power and collective dominance. Thames Water and the Class A AHG opposed the application on case-management and evidential grounds.

The central issues were whether the report was reasonably required under CPR 35.1 and whether its admission would be consistent with fairness, proportionality and the overriding objective.

1. Application dismissed. The draft expert report was not reasonably required to resolve the proceedings and its admission would create unacceptable fairness, timetable and case-management difficulties.
2. Under CPR 35.1, the court must ask whether expert evidence is necessary. If not, it must consider whether it may assist the court and balance its relevance and probative value against proportionality, expense, delay, prejudice and the overriding objective: British Airways plc v Spencer [2015] EWHC 2477 (Ch) at [63] and [68]. The same approach applies in competition cases.
3. The application was materially late. The competition argument, including a new Chapter II case, had not been sufficiently crystallised at the convening hearing, and the report was served only shortly before the sanction hearing. Admission would leave inadequate time for responsive evidence and could jeopardise the fixed hearing date, which was important given the Group’s liquidity position and the possibility of an expedited appeal.
4. Much of the report explained competition law or legal concepts from an economic perspective. That was not a proper substitute for legal submissions. The harder-edged economic analysis was expressed in qualified and speculative terms, depended on unavailable further evidence, and did not provide a sufficiently reliable market definition, assessment of market power or analysis of collective dominance.
5. The analogy with bid rigging and self-preferencing raised legal questions about the essential characteristics of those categories. An economist’s perspective was neither necessary nor sufficiently helpful on that issue. The alleged effects case was also unclear because the condition did not require the company to select funding from any particular creditor group or prevent an open financing process.
6. The court did not determine whether the underlying competition objection was arguable or sustainable. It held only that the proposed evidence was not reasonably required and would be an inappropriate distraction in the circumstances.