- Litigation Futures - https://www.litigationfutures.com -

CAT gives truck buyers green light to pursue costs

Roth: No hardship for defendants to pay now

The Competition Appeal Tribunal (CAT) has given the claimants in the truck cartel litigation the green light to move forward without delay to a detailed assessment of the costs of a preliminary hearing given the two sides’ contrasting financial resources.

Mr Justice Roth, president of the tribunal, said that in contrast to the truck manufacturers, which were large multinationals, UK Trucks Claim Limited (UKTC) was a special purpose vehicle “reliant on outside funding and acting for many small businesses”.

Roth J said the manufacturers argued that any costs assessment should wait until the conclusion of UKTC’s application for a collective proceedings order (CPO).

Last April, the CAT put on hold a decision [1] on whether to authorise class representatives in the truck cartel litigation pending the Supreme Court decision on CPO applications in the Mastercard v Merricks case.

However, the CAT heard as a preliminary issue the question whether, as a result of their funding arrangements, the UKTC and/or the other claimant group organised by the Road Haulage Association should not be authorised to act as a class representative.

The tribunal ruled in November [2] that agreements with third-party litigation funders are not damages-based agreements, and so not unenforceable and unlawful.

Roth J said the tribunal recognised that the “more usual course” was to wait until the matter was finally resolved before assessing costs, but there was “no fixed rule in that regard”.

He said payment of preliminary issue costs was “no hardship” for the truck manufacturers, who were found to have operated a “very serious and prolonged infringement” of competition law.

“In all the circumstances, we consider that it is just and appropriate for UKTC to be able to send the costs that it has been awarded for assessment now and not to have to wait for what may well be another year until judgment on the second part of the CPO application, which will be heard only after the Supreme Court delivers its judgment in Merricks.”

Roth J said the Road Haulage Association had already reached agreement with the defendants over the costs of the preliminary issue hearings.

“Since UKTC was wholly successful on the DBA issue, DAF, Iveco and MAN should pay the proportion of its costs attributable to that issue, to be subject to detailed assessment if not agreed.”

Roth J said the DBA issue took up only one day of the three-day hearing in November, the rest being taken up by objections to the nature and adequacy of the funding arrangements.

On this, the judge said UKTC accepted that there would have to be “some discount” to its costs, given the “extent to which it had to amend and revise its funding proposals”, both in response to objections raised by the manufacturers and the CAT.

The UKTC argued the discount should be limited to 20%. The manufacturers argued that, given the “succession of amendments”, there should be no award of costs on this issue.

Roth J said the manufacturers’ argument “mischaracterises” the position. There were “considerable challenges” to aspects of UKTC’s funding which “completely failed”, particularly to the amount of funding and after-the-event insurance cover for defendants’ costs.

The CAT concluded that UKTC should recover 60% of its costs attributable to arguments over the nature and adequacy of its funding.