First opt-out class action withdrawn after damages found to be insufficient

Roth: useful ruling

The first attempt to bring an opt-out class action has failed after a decision of the Competition Appeal Tribunal (CAT) that meant the claim would not be worth enough money to proceed.

Dot Gibson, the general secretary of the National Pensioners Convention (NPC), has agreed to pay Pride Mobility Products, the largest supplier of mobility scooters in the UK, £309,000 in costs after withdrawing the action.

Ms Gibson – who was represented by Leigh Day – had brought the action to recover compensation for around 30,000 consumers whom she alleged were overcharged for a Pride scooter as a result of Pride’s breaches of competition law between February 2010 and February 2012.

The claim follows on from a 2014 decision of the Office of Fair Trading that Pride breached competition law by banning retailers from advertising prices online below Pride’s recommended retail prices for its scooters.

Ms Gibson claimed that this made it harder for potentially vulnerable consumers to shop around for the best price and led to them paying too much for their scooter.

In March, Mr Justice Roth, president of the CAT, largely found in favour of Ms Gibson’s application for permission to proceed with the class action but adjourned the case to allow her to reconsider issues raised during the hearing about the proposed methodology to assess damages.

In a statement on Friday, the NPC said: “Unfortunately, after reframing the way damages were calculated, Ms Gibson decided the case was not worth enough money to proceed given the costs.

“Ms Gibson did not agree with the tribunal’s reasons for saying how her expert economist had calculated damages was wrong; however, there is no right of appeal and she decided not to bring judicial review proceedings. She decided she had no option but to withdraw the claim.”

The earlier hearing had established that Ms Gibson had arranged, through Burford Capital, after-the event insurance underwritten by Great Lakes Reinsurance, for Pride’s costs up to £1.08m and her own disbursements in the event that the claim was unsuccessful.

Roth J’s ruling will nonetheless help others bringing class actions, including his finding that the fact the impetus for the proceedings came from Leigh Day was not objectionable.

“This seems to us almost inevitable with collective proceedings in particular for consumers, most of whom would be unaware that it was practicable to bring proceedings of which the cost vastly exceeds the individual loss they suffered,” he said.

“The relevant question is whether the class representative is able to ensure that the proceedings are then conducted in the interests of the class and not of the lawyers.”

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