The Competition Appeal Tribunal (“Tribunal”) has decided in favour of allowing the Road Haulage Association (“RHA”) to proceed with its collective claim aimed at securing compensation for truck operators adversely affected by the trucks cartel. This is the first ever opt-in collective proceedings to have been certified by the Tribunal under the new regime and RHA’s success is even more notable given that it faced a competing opt-out (alternatively opt-in) application by UK Trucks Claim Limited (“UKTC”) which was dismissed in its entirety.
David Went from Exchange Chambers, instructed by Backhouse Jones Ltd, is part of the counsel team acting for RHA.
David Went commented: “This is a significant win for the RHA and the UK road haulage industry. It is also a legal first as the first opt-in proceedings to be approved by the Tribunal under the collective proceedings regime. While the scope of the proposed proceedings was scaled back in some respects, the bulk of what was proposed has been accepted by the Tribunal and this means that tens of thousands of small businesses will be given an opportunity of obtaining compensation for the unlawful cartel conduct of the relevant truck manufacturers.”
RHA issued its claim for a collective proceedings order (“CPO”) in July 2018 following a European Commission decision which found that major European trucks manufacturers had engaged in a price-fixing cartel between 1997 and 2011. However, the hearing to determine whether the Tribunal would award it a CPO was held only in April 2021 following a stay of proceedings until the Supreme Court had delivered judgment providing guidance on the collective proceedings regime in another collective claim. UKTC, a special purpose vehicle created for purposes of bringing the proposed collective proceedings, had also issued its claim around the same time and there was considerable overlap in the claims encompassed by UKTC’s and RHA’s respective actions.
Both claims were contested fiercely by the truck manufacturers but, while UKTC’s claim was dismissed, RHA was successful on most points. The Tribunal rejected arguments to the effect that heterogeneity within the market (including the wide variety of truck specifications, the significant degree of bundling of extra features with the sale of “bare” trucks, the acquisition of trucks from independent dealers at discounted rates off gross prices, and the enormous variation in bargaining power across different class members) meant that the alleged overcharge arising from the cartel could not be dealt with as a common issue. The Tribunal was also not persuaded that the proposed collective proceedings should not include larger operators with significant claims in their own right.
A key aspect of the Tribunal’s judgment was how to approach the situation in which there were two proposed class representatives seeking to be authorised in respect of overlapping claims. While the Tribunal did not consider it was necessary to reach a view as to whether the legal framework permitted only one set of proceedings to continue in such circumstances, the Tribunal decided that it would be wholly inappropriate to approve both the RHA and UKTC applications. In exercising its discretion to approve only one application and reaching the clear view that the RHA opt-in proceedings were preferable to the UKTC proceedings on an opt-out or even opt-in basis, the following matters were highlighted:
- The choice between a well-established trade association and an SPV was neutral as both have certain advantages.
- The class definition proposed by RHA was a significant advantage of the RHA application as it included pre-owned trucks, thereby enabling a large number of potentially affected small businesses to pursue their claims.
- The longer run-off period proposed by RHA gives some benefit to potential claimants.
- RHA’s expert, unlike UKTC’s, had proposed a credible methodology for dealing with potential harm suffered by class members from the coordinated delay to introducing successive Euro emissions technologies.
- The Tribunal had more confidence in the robustness of the expert methodology for calculating damages advanced by RHA’s expert. Moreover, as RHA proposed proceedings would be opt-in, its expert would have access to a significant volume of data from class members.
- It is practicable for the proceedings to be brought as opt-in proceedings as demonstrated by the number of operators already signed up to the RHA claim and the expectation that many more firms will join the proceedings.
- Contrary to an argument raised by UKTC, the Tribunal did not believe that there was a realistic concern that the remuneration arrangements with RHA’s funder, Therium, would operate unfairly against class members.
As a result of the Tribunal’s judgment, RHA’s action will cover the following claims by businesses of any size engaged in road haulage operations (on a hire and reward or own account basis) in respect of trucks registered in the UK and weighing 6 tonnes and over:
- Claims for new trucks purchased or leased between 17 January 1997 and 31 January 2014 – both short and long-term leases are included and the relevant point in time is when the purchase or lease contract is entered into;
- Claims for used trucks purchased or leased between 17 January 1997 and 31 January 2015; and
- Claims for increased costs due to the coordinated delay in introducing new Euro emissions technologies during the cartel period and to 31 January 2014.
The Tribunal nevertheless concluded that the following claims or operators should be excluded from RHA’s collective proceedings:
- Trucks registered outside the UK;
- Operators providing road haulage services exclusively on a cost-plus basis where the cost of the trucks has been paid for in full by the recipient of the road haulage services; and
- Claimants who have brought individual actions (unless they discontinue those claims and opt into RHA’s claim).
Finally, while RHA had not yet advanced an expert methodology on the basis of which compound interest could be certified as a common issue, the Tribunal has left it open to RHA to advance such a claim at a later stage in the proceedings.
The RHA claim, which over 18,000 operators have already joined or are planning to join, is currently valued at over £2 billion. Once the terms of the collective proceedings order have been confirmed by the Tribunal, there will be an opportunity for more truck operators to join the claim (including those who have already started individual actions) and the Tribunal agreed with RHA’s assessment that many more firms would likely do so.