On 29 September 2021, the Court of Appeal ruled on the claim lodged by 28 thousand individuals from the Bonga Community against Shell.[1] The primary issue in this appeal was whether the claims for remediation relief against Shell of the 28 thousand individuals from the Bonga Community could be pursued by two individuals from this Community by way of representative action. The Court of Appeal rejected the appeal and ruled that these claims could not be lodged in the form of a representative action. In its judgment, the Court of Appeal analysed the circumstances under which a case could be instituted as an action by representatives of persons with the same interest, along with the specific requirements and related limitations. The Court of Appeal was of the opinion that this was a threshold issue and that in this case, the claim could not constitute a representative action. Lord Justice Coulson stipulated that the fact that the claimants have the same interests is a basic ingredient and that this was entirely missing in these circumstances. In particular, the requirement of having the same interest was not satisfied with regard to the scope of the claim. Each individual claim would therefore be “tried to a conclusion”, which would lead to a patchwork of success – which, in his opinion, is not a representative action. For the Bonga Community, this means that each of its members would need to prove individually that he, she or it had individually suffered loss and damage. As a precedent, certainly in cases in which there is a need for an individual analysis of the causation and the loss and damage, claimants may experience difficulties in complying with the “same interest” test.
On 30 July 2021, Prysmian, producer of underground and submarine cables for the transmission and distribution of electricity, reached a confidential settlement agreement with Scottish and Southern Energy and other energy companies in proceedings concerning Prysmian’s involvement in the power cables cartel.[1] On the side of Prysmian, the entities involved in the settlement agreement are Prysmian Cable & Systems Limited, Prysmian Cavi E Sistemi SRL, Prysmian S.P.A., Prysmian Construction Company Limited and Prysmian Cables (2000) Limited, and on the other side SSE PLC, Scottish and Southern Energy Power Distribution Limited, SSE Services PLC, Southern Electric Power Distribution PLC, Scottish Hydro Electric Power Distribution PLC, Scottish Hydro Electric Transmission PLC.[2]
[1] European Commission decision of 2 April 2014, Case AT.39610 (Power cables).
[2] CAT Consent order of 20 August 2021, Case Nos 1353/5/7/20 (T).
On 26 July 2021, the CAT ruled that cartelist NTN may not appeal the Tribunal’s decision of 18 June 2021[1] in which the Tribunal disregarded some of NTN’s defences regarding mitigating circumstances for the claimants by reducing other costs.[2] NTN was fined by the European Commission (EC) in 2014 for its participation in the ball bearing cartel.[3] Ball bearings are used to attach the wheel axle to a vehicle or to attach the wheel to the axle. In response to the EC’s fining decision, Fiat Chrysler Automotives (FCA) initiated proceedings in which it wants to claim its loss from NTN. The CAT ruled that the appeal that NTN wanted to lodge against the decision of 18 June 2021 does not have a “real prospect of success” and is therefore not allowed.
[1] CAT 18 June 2021, [2021] CAT 14, Case No 1357/4/7/20 (T).
[2] CAT 26 July 2021, [2021] CAT 25, Case No 1357/5/7/20 (T).
[3] European Commission decision of 19 March 2014, Case Comp/39922 (Bearings).
On 15 July 2021, the Japanese bank Mitsubishi UFJ Financial Group (formerly Bank of Tokyo-Mitsubishi) told a UK judge during the last day of a five-day hearing at the UK’s specialised competition court that the allegation of “tacit coordination” was erroneous and detrimental to the mass antitrust claim lodged by former inquiry group chairman of the Competition and Markets Authority Phillip Evans.[1]
MUFG was fined nearly 70 million euros ($83 million) by the European Commission in May 2019 for being involved in one of two cartels in the spot forex market, which are agreements to exchange a specific amount of one currency against another.
Evans is one of two class representatives seeking, on behalf of thousands of investment firms, to sue MUFG and others for billions of pounds in damages over the cartel activity. He argued that the sharing of information within the cartel facilitated tacit, or inexplicit, coordination between traders to widen “bid-ask” spreads. Further, he said that due to their market power, the cartelist banks had the ability and incentive to “engage” in tacit coordination on spreads.
MUFG told the UK judge that this was a flawed allegation and that the tacit coordination is just a theory. It is unfeasible for a few participating traders to tacitly control the market and cause this alleged widespread coordination of spreads. Moreover, the banks were not in a position to engage in tacit coordination as their market shares fluctuated over time.
It was the Commission’s investigation that revealed that some individual traders in charge of forex spot trading, on behalf of banks, exchanged sensitive information and trading plans, and occasionally coordinated their trading strategies.[2] It said that activity, resulting from a “tacit understanding” between traders, enabled informed market decisions.
MUFG said about this investigation that they contest the notion that you can go from incidental spread exchanged between a handful of traders to tacit coordination of all spreads by those traders, and then to tacit coordination of all spreads by those banks.
[1] According to MLex, “Banks didn’t and couldn’t use ‘tacit coordination’ to rig forex prices, MUFG tells UK judge,” 15 July 2021.
[2] European Commission, “Antitrust: Commission fines Barclays, RBS, Citigroup, JPMorgan and MUFG €1.07 billion for participating in foreign exchange spot trading cartel,” 16 March 2019, https://ec.europa.eu/commission/presscorner/detail/it/IP_19_2568.
On 13 July 2021, another lawsuit was filed in connection with the truck cartel[1] at a London court. UK retailer William Morrison Supermarkets is claiming damages from truck manufacturers DAF Trucks and Volvo for their involvement in the cartel together with other truck manufacturers that received a record fine from the European Commission in 2017.[2]
[1] European Commission decision of 19 July 2016, case AT.39824 (Trucks).
[2] According to MLex, ‘Retail group Morrisons sues Volvo, DAF in UK over trucks cartel’, 13 July 2021.
In July 2021, the Competition Appeal Tribunal (CAT) examined the battle between two competing mass claim representatives for permission to conduct an action for damages during a five-day hearing. These are proceedings against various banks, including JPMorgan Chase, Barclays and UBS because of their role in the spot forex trading cartel[1]. This requires the CAT to pioneer in the context of the UK class action regime because it is the first time that the CAT is asked to render a decision on which of the two potential mass claim representatives may conduct the proceedings. Both aim to apply an opt-out regime in which injured parties automatically participate, unless they indicate that they do not wish to do so. It is therefore impossible for both claims to result in actual proceedings and the CAT will therefore have to choose which of the two will be allowed to continue.
The two potential representatives are Michael O’Higgins, former head of the UK pension regulator, and Phillip Evans, former chairman of the Competition and Markets Authority (CMA) inquiry group.[2] Both want to represent thousands of institutional investors and act on their behalf in order to recover the damage they have suffered from the banks.
During the hearing, the suitability of both claims was discussed, including in the areas of litigation planning, funding, and definitions of the group to be represented. O’Higgins’ group managed to obtain more financing than Evans’ group, but Evans argued that this would not necessarily mean that O’Higgins’ claim for damages is more suitable than his and that his financing would in any event be sufficient.[3] The banks defended their position, inter alia, by asserting that, in so far as one of the proceedings were even permitted, only an opt-in regime would be appropriate in this case because of the nature of the group and the value of the possible claim. According to the banks, the opt-out regime as introduced in the UK legal system was not intended for large and well-to-do companies like the injured parties in this case.[4] As far as possible representatives are concerned, an opt-in regime is in fact not suitable because it entails practical difficulties such as having to approach and contact potential injured parties, which will take a lot of time.
The group of injured parties to be represented will include pension funds, asset managers and hedge funds, and the claim for damages to be submitted is estimated at around seven billion euros.
[1] European Commission press release, ‘Antitrust: Commission fines Barclays, RBS, Citigroup, JPMorgan and MUFG €1.07 billion for participating in foreign exchange spot trading cartel’, 16 May 2019.
[2] Case references are 1329/7/7/19 Michael O’Higgins FX Class Representative Limited v Barclays Bank PLC and Others and 1336/7/7/19 Mr Phillip Evans v Barclays Bank PLC and Others.
[3] According to MLex, ‘Rival claimants for forex-rigging damages lay out core arguments for trial suitability’, 12 July 2021.
[4] According to MLex, ‘UBS insists forex-cartel mass damages claims only viable as ‘opt in’ actions, 14 July 2021.
In Q1, we wrote about the decision of the High Court that was detrimental to investment funds Allianz Global Investors et al. The High Court had not given them permission to appeal the decision that allowed the banks that participated in the foreign exchange cartel in the proceedings instituted against them by the funds to assert in those proceedings that the investment funds passed on the damage they believed to have suffered to investors. The High Court initially had not given permission for reasons concerning case management because it feared a delay in the proceedings if the appeal were allowed.
In Q2, both the investment funds and the other claimants were given permission to appeal this decision. This will give them another opportunity to challenge the passing-on defence of the cartelists. According to the claimants, only the investment funds have a possible legal claim against the cartelists and this does not apply to independent investors. In addition, they believe that if the District Court were to agree with this passing-on defence of the banks, this would have far-reaching (and undesirable) consequences for the scope of future claims and thus also for the necessary provision of proof and the surrender of and access to documents in these and similar proceedings. The hearing is scheduled for 8 December 2021,[1] so that we will report on it in Q4.
[1] According to MLex, ‘Allianz Global Investors, others win permission to appeal UK forex cartel ‘pass-on’ ruling’, 1 July 2021.
In June 2018, British Airways (“BA”) fell victim to a hack, exposing the payment details of more than 400,000 customers. In response, the UK’s data protection authority, the Information Commissioner’s Office (“ICO”) started an investigation. Since the BA hack occurred in June 2018, i.e. before the UK left the EU, the ICO investigated the data breach on behalf of all European authorities as lead supervisory authority under the GDPR. The investigation resulted in a 20 million pound fine imposed by ICO on 16 October 2020.
The ICO investigation was quickly followed by a class action suit in April 2020, which is thought to be the biggest claim for a data breach in British legal history. In July 2021, BA announced that it had reached a settlement with a number of the claimants. As the contents of the settlement agreement remain confidential, it is unclear how many of the affected claimants will receive compensation. Nevertheless, it is expected that the pay-outs amount to 2,000 pounds per claimant.[1]
[1] Information on the settlement & ICO fines British Airways £20m for data breach affecting more than 400,000 customers, 16 October 2020
On 8 September 2021, the District Court of The Hague ruled on the consequences of late entry of the summons into the central register for class actions.[1] The summons of Stichting Nationaal Comite Tegen Verplichte Mondkapjes was only entered into the register more than two weeks after being issued. The writ, too, was only submitted with the court registry more than two weeks later. As a result, the period of two days prescribed in Article 1018c(2) was not complied with, resulting in these acts taking place after the deadline. The District Court found that the prescribed entry in the register was intended to inform third parties wishing to initiate proceedings as soon as possible of the action brought. As follows from Article 1018d DCCP, the time limit for bringing the same action is three months and commences after the entry of the summons in the register. Based on this premise, third parties were not prejudiced by the circumstance that the entry in the register was not made within two days, but more than two weeks after the summons was issued. The District Court also considers the tardy submission of the writ to the court registry to be nothing more than an administrative omission, without prejudicing any (potential) parties to the proceedings. Consequently, a late entry in the register or late submission to the court registry need not lead to the Stichting’s claims being inadmissible.
[1] District Court of The Hague, 8 September 2021, C/09/616983.
On 8 September 2021, the court in Stichting Massaschade & Consument v. Airbnb Ireland decided on the Stichting’s request to extend the term for lodging a claim.[1] It follows from Article 1018d(1) of the Dutch Code of Civil Procedure (DCCP) that a legal entity referred to in Article 3:305a DCC can bring a class action for the same event or events within three months before the same court where a class action has already been brought. This period may be extended by a maximum of three months in accordance with paragraph 2 if a legal entity that meets the conditions requests the court to do so. In Stichting Massaschade & Consument v. Airbnb Ireland, the Stichting based this claim on the fact that it wished to await preliminary ruling proceedings before the Supreme Court, which were instituted against Airbnb on a different matter. The Stichting asserted that initiating proceedings on this point before that time would be an unnecessarily costly and time-consuming affair. It therefore requested the District Court to grant it a 9-month extension. The District Court went on to rule that there is no legal basis for doing so, stating first and foremost that the period of nine months is longer than the maximum period of three months that is permitted. Secondly, the District Court concluded that the Stichting wished to make the decision whether or not to bring a class action dependent on the outcome of preliminary ruling proceedings. It considers this to be contrary to the literal text of Article 1018d(2) DCCP, as it follows from said text that the interest group must have already decided to also bring a class action, but merely needs more time for its execution than the initial three months.
[1] Cause-list decision of 8 September 2021 in STICHTING MASSASCHADE & CONSUMENT v. AIRBNB IRELAND UC.
