Reaching the limit: Competition Appeal Tribunal confirms application of limitation rules in standalone claims

• The Tribunal has “always been regulated by its own rules” and so it was wrong to say that the Limitation Act 1980 should apply as some sort of “default position” in the absence of the Tribunal’s own rules.
• Contrary to Mr Gutmann’s argument, there was nothing unworkable about applying the two-stage test set out above to ascertain the start date of the limitation period. For standalone claims, the start date would be the date on which the cause of action accrued (limb (b) of the test), because the date of the infringement decision (limb (a) of the test) does not apply to standalone claims.
• Even though the heading of rule 119 of the 2015 Rules was entitled “Savings”, on the proper construction of rule 119 of the 2015 Rules, it was clear that rule 31 of the 2003 Rules was intended to apply to standalone claims.
• Mr Gutmann’s argument that the Tribunal’s construction of rule 119 of the 2015 Rules ran contrary to the statutory purpose of introducing collective proceedings was wrong. Mr Gutmann accepted that some limitation period should apply and, as set out above, the Tribunal held that it was wrong to suggest the Limitation Act 1980 was a “default position”. 

As a result, the Tribunal struck out all claims in relation to losses arising before 1 October 2015.

Issue 2: whether claims between 1 October 2015 and 8 March 2017 are time-barred

It was common ground that the relevant limitation period in respect of claims arising after 1 October 2015 but before 8 March 2017 was governed by the Limitation Act 1980, pursuant to (the now repealed) s.47E Competition Act 1998. In order that these claims not be time-barred, Mr Gutmann would need to rely on s.32 Limitation Act 1980, which provides that in cases of fraud or deliberate concealment by a defendant, time does not start to run until the claimant has discovered the necessary facts or could with reasonable diligence have discovered them. The key issue was whether Mr Gutmann had a real prospect of showing that s.32 applied. 

Vodafone, EE and Three asserted that consumers were aware of the relevant facts such that they could not rely on s.32 and so these claims should be struck out as time barred. They argued that users were, or should have been, aware of the core commercial terms of their contract, and that it was widely known that alternative, cheaper rates would be available for telephony-only services. In the alternative, the network operators pointed to various trade materials such as the 2015 Consumers’ Association Press Release, a 2017 Ofcom report and a 2017 Citizens Advice Press Release dealing with these issues to prove that the consumers had all of the facts necessary to bring a claim more than six years earlier. 

The Tribunal declined to strike out these claims. The threshold for strike out is high, and the defendants had not satisfied the Tribunal that Mr Gutmann had no reasonable prospect of successfully invoking s.32.

In the alternative, Vodafone, EE and Three argued that, if the Tribunal had to consider the actual knowledge of the proposed class members for the purpose of s.32 of the Limitation Act, then this granular assessment of individual class members would make the claim unsuitable to be brought in collective proceedings. The Tribunal rejected this argument and found that the application of limitation law to the applicable claims is a common issue. 

Issue 3: certification

Vodafone, EE, Three and O2 raised the following objections to certification.

• The proposed class was not “identifiable” (as required by rule 79(1)(a) of the 2015 CAT Rules) and it was not possible to determine in respect of any person whether they were a member of the class (as required by rule 79(2)(e) of the 2015 CAT Rules).
• Mr Gutmann’s funding arrangements were unsatisfactory. 

On the first objection, although recognising that the two were linked, the Tribunal drew a distinction between rule 79(1)(a), which focuses on the “design of the proposed class definition” and whether it is objective, clear and capable of identifying a class and rule 79(2)(e) which focuses on the “practicality and mechanics” of “verifying whether a particular individual falls within the proposed class”.

In relation to rule 79(1)(a), the Tribunal found that the class definition was clear and there was no question of this definition including proposed class members without a claim. The Tribunal acknowledged that the task of quantifying the damages suffered by the class members would be challenging, but it was less complicated for a class member to identify whether damage was actually suffered. 

In relation to rule 79(1(2)(e), the Tribunal was satisfied that the methodology set out for proposed class members to identify themselves as members of the class was workable. The Tribunal considered that potential class members would be able to identify themselves as they would be aware (i) that they paid for telephony services during the relevant period, (ii) the payments they made and (iii) the period for which they were making those payments.

The defendants’ concerns as to Mr Gutmann’s funding arrangements included that the funder’s parent company had filed an annual statement which raised a material uncertainty as to its ability to continue as a going concern. However, the Tribunal held that Mr Gutmann had responded “promptly and assiduously” on becoming aware of the annual statement. The Tribunal concluded that at present Mr Gutmann’s funding arrangements would not prevent him from acting fairly and adequately in the interests of the class members, but ordered that this should be kept under review. 

Practical takeaways and comment

This judgment:

1. provides helpful commentary on the application of limitation rules to collective proceedings and resolves a previous uncertainty as to the application of the 2003 Rules to standalone claims;
2. reiterates the importance of ensuring that there is a clear class definition with a workable methodology for identifying and verifying class members; and
3. consistent with the decision in Riefa, reaffirms the Tribunal’s expectations in relation to a proposed class representative’s awareness and understanding of their funding arrangements. 

Read the full judgment.