Public Law

Why is it that there have only been half a dozen examples of competition litigation in Scotland since the Competition Act 1998 came into force in March 2000, when the month of July 2012 alone saw a larger number of cases in the news UK-wide (leaving aside the 4 cases concerning BT, its competitors and OFCOM)? It must of course be because every business in Scotland has and applies its competition compliance manual as part of its devotion to corporate governance… but lets see what it could be like from a bird’s eye view of July 2012’s cases in the CAT, High Court and Court of Appeal in London:

– the first award of damages has been made in a follow-on claim under Section 47A of the Competition Act 1998 by the Competition Appeal Tribunal in 2Travel v Cardiff Bus. What’s more it is the first case in which any court or tribunal has awarded Exemplary damages under the Rookes v Barnard principles – the deliberate nature of the predatory behaviour in abuse of its dominant position by the  municipal bus company, Cardiff Bus, where half the board consist of local councillors, called the CAT. The sums awarded (£33,000 plus interest and £60,000) are modest demonstrating how the facts of each case will be different.

– in the second case of note, the Court of Appeal overturned the CAT’s long applied interpretation of the word “decision” in Section 47A, holding that it is a decision that there had been an infringement of competition law. It followed that the limitation period for bringing a damages action is extended while an appeal against that decision is pending before the European Courts or could be still so appealed. Therefore, the claimants action for damages against Morgan Crucible was not out of time.

– then, in some cartel cases the CAT transferred 21 claims against the copper tubes manufacturers from the CAT to the Chancery Division at the claimants request under Rule 48 of the CAT Rules.

having allowed the defendants to delay filing defences until such time as the Chancery Divison determined (W/H.Newson Holding Limited & Ors v IMI Plc & Ors).

– a further appeal from the CAT to the Court of Appeal appears to pay off for, since the CA reduced the fine imposed by the CAT, £324,000, following its successful appeal against the OFT construction cover pricing decision to £202,000. The CA accepted the argument of Interclass that it’s fine was disproportionate compared to fines imposed by the CAT on other appellants. In particular, the CAT did not provide objective justifications for its decision to increase the starting point of its revised fine by a factor of two for the purposes of deterrence.

– finally, the next chapter in the Ryan Air challenge to the Competition Commission seeking to exercise jurisdiction over its acquisition of a minority interest when the European Commission has exclusive jurisdiction under Article 21 of the EU Merger Regulation is likely to be easier now it has bid for the whole of Aer Lingus again and notified its bid to the European Commission (Ryan Air/Aer Lingus III COMP/M.6663).

What a menu for the summer – follow -on cases on abuse of dominance and cartels, stand alone damages cases against alleged cartels, cartel/bid rigging fines appeals and judicial review of mergers. Shame about the weather!

Niall McLean

Associate at Brodies LLP
Niall is a member of Brodies' market leading Government, Regulation and Competition practice. Niall gives both public and private sector clients advice in a broad range of areas including: corporate crime and investigations, governance, defamation and reputation management, public law and statutory interpretation.
Niall McLean