It has been reported in the news recently that the Road Haulage Association has brought a claim in the Competition Appeal Tribunal on behalf of road hauliers overcharged when they bought or leased trucks from certain major European truck manufacturers. They are seeking compensation in excess of £6,000 per truck and it is estimated that the total value of the claim is in the region of £5 billion.
On 19 July 2016 the European Commission fined Daimler, Volvo/Renault, Iveco and DAF in aggregate a record €2.93 billion for colluding on prices and passing on the costs of emissions-reducing technology. Daimler received the biggest fine of €1billion, Dutch company DAF €753m, Volvo/Renault €670m and Iveco (Italian) €495m. Scania (of Sweden), owned by Volkswagen, denied any involvement but were subsequently found in 2017 to have participated in the cartel and also fined.
It is believed these manufacturers between them control about 90% of the European truck market and that during the cartel period they sold an estimated 30 million trucks.
The “whistle-blower” who revealed the existence of the cartel to the Commission was MAN (also owned by Volkswagen) who in return received immunity from any fine (reported to have been around €1.2bn) notwithstanding its participation in the cartel. Cartel meetings involved senior managers of all the truck manufacturers took place several times a year.
The cartel operated over an extended period of time from 1997 to 2011 and colluded to increase the prices of medium and heavy trucks in the European Economic Area on when to introduce emissions technologies and passing on the cost to the customer.
The purchasers affected are those who purchased medium sized (6-16 tonnes) and heavy (16 tonnes plus) trucks during the cartel period. There will be a wide variety of potential claimants, including individual purchasers, small freight operators and large logistic road hauliers. The method of purchase or leasing the truck will vary, as will the calculation and quantum of their losses.
Various proceedings have been commenced against the “cartelist” truck manufacturers both in and outside the UK (for example in Germany and Ireland). Proceedings in the UK can be commenced either in the High Court or the Competition Appeal Tribunal. There are differences between them, for example regarding procedure and composition, that may lend themselves to be more or less attractive as to the venue in which to issue proceedings.
The Road Haulage Association has over 7,000 members and, as previously mentioned, has started a “collective” claim before the Competition Appeal Tribunal in London to secure compensation for its members from the cartelists.
A “collective” proceeding may be brought since 1 October 2015 by a person proposing to be a class representative (in this case the RHA) and may be brought on either an ‘opt-in’ or an ‘opt-out’ basis (i.e., the claim may be brought on behalf of each class member without specific consent unless a member elects to opt out). The RHA have commenced collective “opt-in” proceedings.
The concept of a “collective” action is that all claimants that form part of the group have similar claims that raise common issues. The common issues will be dealt with at trial, and judgment on those issues will be binding on all claimants that have opted into the group claim. On resolution of the common issues, individual issues will be determined followed by a distribution of the compensation to all claimants.
Medium and large companies may not want to be involved in a “collective” proceeding that limits their control over the proceedings. In these instances they may wish to issue on their own or with a limited number of others where there are common issues as to fact and law.
In these types of cases, the parties will choose the “lead claimants” as test cases, with the claims of the remaining group claimants being stayed pending resolution of the test cases. If the test cases are resolved in favour of the relevant lead claimants, this might pave the way for a satisfactory resolution of the remaining stayed cases.
Whichever type of “class” or “group” action is contemplated, claimants need to enter into a litigation management agreement to deal with matters such as costs sharing and appointment of an executive committee relating to the prosecution of the action.
Temple has received a number of enquiries from lawyers regarding ATE insurance relating to these “competition” type claims. These actions are expensive to run, not least due to the extensive disclosure of documents involved and the need to instruct experts to determine the quantum of loss. Third party funding will likely be sought to pay for own solicitors’ costs and disbursements and for Counsel.
Third party funders will carry out extensive due diligence prior to making any offer of funding. Of primary concern to them will be the level of damages sought, projected costs of the claim and solvency of the defendant. If funding is offered and accepted a litigation funding agreement will be entered into, which often accommodates the payment of any ATE insurance premium.
Temple anticipate that, due to the relevant truck manufacturers admitting liability in clear and unequivocal terms, there will be a substantial number claims commenced against them where the only issues will be on causation and quantum.
To find out more about ‘group’ litigation backed by litigation/ATE insurance, please call our commercial team on 01483 577877 or send an email to firstname.lastname@example.org