Last week, the Competition Appeal Tribunal (CAT) agreed to a collective proceedings order (CPO) that would allow the Road Haulage Association to bring an opt-in class action against major truck-makers for follow-on damages arising from the trucks price-fixing cartel (to inflate the price of vehicles) which was the subject of a European Commission decision in 2016. According to an article in Law360 (paywall), the claim is worth approximately £2 billion ($2.6 billion).
At Friday’s hearing, the CAT decided that the RHA had adequately addressed the deficiencies with its first application for certification in terms of: (i) the treatment of dissolved companies; (ii) leases of used trucks and the run-off periods and (iii) adequate funding in relation to the conflict of interest between claims for new and for used trucks.
On the latter, it was interesting to see the postscript in the CAT’s ruling related to the role that litigation funding plays in the CAT in that it “effectively provides the fuel which enables the vehicle of collective proceedings to operate” but with the caveat that “with that significant role comes responsibility”. The Tribunal’s dissatisfaction with the last hearing in June was aired: that litigation funders were “less than frank about the arrangements” in dealing with the conflict of interest between claims for new and used trucks. In fact, the Tribunal noted that the evidence provided in the second witness statement made by the funder “at the time it was made… does not appear to have been correct.”
The panel felt the need to highlight the issue, stating, “We hope that in future Therium, along with other third-party funders, will take proper care that the information which they provide to the tribunal, or indeed the courts, is accurate.”
For any observer of these types of cases in the CAT, this scrutiny of the funding arrangements will not come as a surprise. The opaque financing structures in place for large competition cases such as this are a feature, not a bug in the system. Over the last 18 months we have consistently highlighted the problems that have arisen because of the lack of transparency of the Third-Party Litigation Funding (TPLF) sector.
It is encouraging that the Civil Justice Council is currently examining these issues and will report its recommendations back to the Government next year. FCJ hopes that transparency of the TPLF sector is recognised as a vital first step in that process.
Seema Kennedy OBE, Executive Director, Fair Civil Justice
New £2bn Competition Claim Certified but Criticism Levelled at Funders
Last week, the Competition Appeal Tribunal (CAT) agreed to a collective proceedings order (CPO) that would allow the Road Haulage Association to bring an opt-in class action against major truck-makers for follow-on damages arising from the trucks price-fixing cartel (to inflate the price of vehicles) which was the subject of a European Commission decision in 2016. According to an article in Law360 (paywall), the claim is worth approximately £2 billion ($2.6 billion).
At Friday’s hearing, the CAT decided that the RHA had adequately addressed the deficiencies with its first application for certification in terms of: (i) the treatment of dissolved companies; (ii) leases of used trucks and the run-off periods and (iii) adequate funding in relation to the conflict of interest between claims for new and for used trucks.
On the latter, it was interesting to see the postscript in the CAT’s ruling related to the role that litigation funding plays in the CAT in that it “effectively provides the fuel which enables the vehicle of collective proceedings to operate” but with the caveat that “with that significant role comes responsibility”. The Tribunal’s dissatisfaction with the last hearing in June was aired: that litigation funders were “less than frank about the arrangements” in dealing with the conflict of interest between claims for new and used trucks. In fact, the Tribunal noted that the evidence provided in the second witness statement made by the funder “at the time it was made… does not appear to have been correct.”
The panel felt the need to highlight the issue, stating, “We hope that in future Therium, along with other third-party funders, will take proper care that the information which they provide to the tribunal, or indeed the courts, is accurate.”
For any observer of these types of cases in the CAT, this scrutiny of the funding arrangements will not come as a surprise. The opaque financing structures in place for large competition cases such as this are a feature, not a bug in the system. Over the last 18 months we have consistently highlighted the problems that have arisen because of the lack of transparency of the Third-Party Litigation Funding (TPLF) sector.
It is encouraging that the Civil Justice Council is currently examining these issues and will report its recommendations back to the Government next year. FCJ hopes that transparency of the TPLF sector is recognised as a vital first step in that process.
Seema Kennedy OBE, Executive Director, Fair Civil Justice
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