Reflections on the fast-moving UK competition litigation space

Reflections on the fast-moving UK competition litigation space

A series of recent judgments and ongoing case and regulatory developments will have potentially wide-ranging implications for UK competition litigation on a number of fronts.

We reflect on what these may mean for class actions, digital firms and the role of expert evidence against a background of the ever-growing number of private enforcement cases in the UK.

Class actions

Collective actions remain an area of growth in the UK. At the start of 2024 the Competition Appeal Tribunal (CAT) listed over 40 collective action cases, a number that is expected to increase. The cases currently before the CAT span the full lifecycle of the litigation process, including certification, post-certification case management and trial. Areas to watch at these different stages include:

  • At the certification stage: new claims continue to be lodged, including a recent claim against UK mobile operators relating to loyalty penalties and claims against water companies alleging abuse of dominance through the provision of misleading information to regulators. At the same time, there is no let-up in claims against digital firms, with around one quarter of the claims filed before the CAT relating to the digital sector. Most claims to date have cleared the bar for certification, but a small number were not certified following initial hearings in 2023 (namely Lovdahl Gormsen v Meta, a class action case relating to consumer data; and the CICC cases, relating to interchange fees on commercial cards). The CAT held a second certification hearing on Lovdahl Gormsen v Meta in early 2024, after which it certified the revised abuse of dominance claim, subject to the class representative filing a short summary of the case. It remains to be seen how other cases that do not initially meet the certification test will evolve.

  • At the post-certification stage: for cases that have been certified, many of which are complex and involve standalone competition claims, active case management techniques are being applied. For example, in a number of cases the CAT has sought to deal with substantive issues via a series of sequential trials. The tribunal has also engaged the economic experts in early discussions on methodology in an attempt to avoid “ships passing in the night". And, generally, it has closely supervised progress to trial, for instance by holding mini-hearings every few weeks to deal with disputes as they arise.

  • At the settlement stage: settlement of collective actions requires approval by the CAT, and in late 2023 the CAT approved the first such settlement – albeit the value at stake was relatively small. The settlement was agreed between Mark McLaren and CSAV, the class representative and a defendant respectively in the RoRo proceedings, a follow-on claim relating to deep sea carriage of new motor vehicles.  

  • At the trial stage: Merricks v Mastercard proceeded to trial on the issue of factual causation in 2023 and the CAT has recently handed down its judgment, with a further judgment awaited on the issue of limitation. A number of collective actions are at or heading to trial on substantive issues in 2024, including Le Patourel v BT and Gutmann v First MTR, Govia & Stagecoach, while some cases are already slated for trial in 2025, such as Kent v Apple. It is an open question how the CAT will deal with cases that rely on theories of harm at the intersection of competition law and consumer protection (e.g. the boundary fares cases, which allege abuse of dominance by rail operators by failing to make extension tickets at the boundary of London travelcard zones sufficiently available to holders of London Travelcards). The approach the tribunal takes in these cases will be of particular interest to those involved in other claims with similar theories of harm that are at an earlier stage.

There have also been a number of recent judgments and case developments in competition litigation outside the class action space that nonetheless may raise relevant issues for class action cases. For example, the recent pharmaceutical products judgments (relating to Liothyronine and Hydrocortisone) address excessive pricing within a regulatory and healthcare context. And a judgment was recently handed down by the High Court in Granville v LG Display, a follow-on cartel damages case relating to LCD panels. This constitutes one of only a small number of cartel damages judgments in the UK, with findings on overcharge and pass-on, amongst other issues, that may be relevant to class action claims.

Litigation relating to new digital competition regulation 

The regulation of digital competition similarly continues to see significant developments. The Digital Markets Act (DMA) came into force in 2023 after the European Commission (EC) designated a number of large firms as platform “gatekeepers”, and the UK Digital Markets, Competition and Consumers (DMCC) bill was laid before Parliament in late 2023. While litigation relating to breaches of the DMCC law will be possible, including under the collective action regime, this is not an immediate prospect as the bill has not yet become law; the House of Lords is still scrutinising the legislation. In contrast, in Europe firms designated as digital gatekeepers will be required to comply with the DMA from March 2024, and private enforcement is widely expected to follow where firms are alleged to be in breach of their obligations.

In the UK, a late amendment to the DMCC bill that would have broadened the class action regime before the CAT to include consumer protection cases failed to pass the House of Commons,  although it garnered some support at second reading in the House of Lords. If this expansion in scope does not occur, we may expect to see a continuation of the existing trend of standalone abuse of dominance collective actions involving end-consumers being brought before the CAT. In a number of instances, these consist of competition claims with consumer protection and privacy issues, as seen in cases to date such as the one relating to boundary fares. It remains to be seen how these claims will be addressed as they work through the courts. What is clear is that novel approaches will likely be needed to adjudge the cases.  

The role of expert economic evidence

In 2023 there was much soul-searching in the UK on a number of aspects of expert economic evidence in competition damages claims. These included:

  • How to develop an appropriate body of expert evidence in large and complex cases – for example, the CAT is grappling with considerable case management challenges in the interchange and Trucks proceedings, which both include a large number of individual cases and related class actions.

  • How to get the best out of economic expert evidence – for example, the Trucks ‘Trial 1’ judgment expressed “concerns about the manner in which certain issues were dealt with in expert evidence, both written and oral” ([2023] CAT 6, paragraph 236), while the Court of Appeal found that in the McLaren certification judgment “the CAT identified the battle lines [between the experts], but said that the battle along these lines was for trial. In our judgment this was an error in approach” ([2022] EWCA Civ 1701, paragraph 50).

These challenges have spurred the CAT to implement a variety of innovative approaches to dealing with expert economic evidence. For example:

  • In several cases the tribunal has adopted an expert-led approach to case management, with experts playing a more prominent role all the way through to trial. Notably, they have been tasked with leading the disclosure process via direct expert-to-expert interaction and submitting overarching ‘positive cases’ incorporating both expert evidence and supporting factual evidence.

  • In light of the Court of Appeal’s McLaren judgment and the complex issues involved in other cases, the tribunal has requested input from the experts on their proposed methodologies at a relatively early stage of various proceedings in order to inform case management decisions. This has involved use of ‘hot tubs’ where the experts give evidence concurrently – which have historically been used primarily at trial rather than as a case management tool – as well as requests for experts to attend regular case management hearings.  

  • The CAT has also taken initiatives that are more structural in nature. In the interchange cases, the tribunal has implemented the Umbrella Proceedings Practice Direction, which makes it easier to group different cases that raise similar issues. It is also seeking to resolve cases by holding series of mini-trials to address issues that it sees as distinct but sequential, with the aim of minimising the costs of litigating certain aspects of the claims if they were to fail at trial on an antecedent issue.

It seems likely that in the coming months we will see further innovation in competition litigation and perhaps a growing understanding of where novel approaches involving expert evidence have succeeded, where tweaks are required and where it might be necessary to go back to the drawing board. However, one thing is already clear: experts will need to be flexible to best assist the CAT.