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Not at all costs: Competition Appeal Tribunal refuses CPO in Atlantic salmon cartel collective proceedings
7 minute read
The Competition Appeal Tribunal (the Tribunal) has refused to grant a Collective Proceedings Order (CPO) in Waterside Class Limited v Mowi ASA & Ors, as it was not satisfied that the relevant costs and benefits justified continuing the proceedings, nor that it was just and reasonable for the applicant to act as the class representative.
The judgment marks the first time the Tribunal has declined to find claims to be eligible for collective proceedings solely due to the outcome of its cost-benefit analysis, and only the second time (read our article on the previous instance) the Tribunal has refused to authorise a proposed class representative (PCR).
While the Tribunal has left the door open for a revised application, its judgment is the latest of several clear recent signals that PCRs bringing opt-out collective proceedings must confront the economics of their claims and the practicalities of distribution already at the certification stage, to demonstrate a realistic pathway to delivering value to the class.
The claim
The proposed class representative, Waterside Class Limited, sought to commence opt-out collective proceedings by applying for a CPO on behalf of an estimated 35-44m consumers who purchased Atlantic salmon in the United Kingdom between October 2015 and May 2019. Ms Anne Heal is the sole director of the company set up to act as the PCR.
The claim alleges that six major Atlantic salmon producers unlawfully colluded to increase the price they charged retailers for farmed Atlantic salmon by manipulating the NASDAQ Spot Price and exchanging commercially sensitive information, and that this inflated cost was, at least in part, passed on to consumers, resulting in an estimated harm of £71-382m to the class.
The origins of the allegations date back to the European Commission’s dawn raids in 2019 and subsequent Statement of Objections in 2024, in which the Commission expressed its preliminary view that certain producers unlawfully colluded to distort competition for spot sales of farmed Atlantic salmon. However, no subsequent infringement decision has been reached, and, in any event, any such decision from the Commission will not bind the Tribunal, nor is it open to the Tribunal to attach weight to the Commission’s findings (as the Supreme Court recently confirmed). The PCR’s claim must therefore be established on a standalone basis.
In parallel, two related claims have been commenced by supermarket claimants, Asda and Tesco, arising from substantially the same alleged infringement.
The Tribunal’s judgment
The Tribunal acknowledged that collective proceedings were prima facie appropriate, particularly where a finding of cartel activity in the Asda and Tesco proceedings would likely bring to the fore pass-on arguments, which would in turn make it desirable for consumers to be able to claim any overcharge that was passed on to them.
However, the Tribunal declined to certify the claim at this stage, on the basis that neither of the relevant conditions for certification (the “eligibility” condition and the “authorisation” condition”) were met.
Eligibility condition: cost-benefit analysis takes centre stage
Lessons learned from Gutmann
Drawing on its recent experience in Gutmann, the Tribunal stated that “when considering the costs and benefits of the proceedings it is appropriate, at certification, to consider how damages are to be distributed. Outcomes which are predominantly for the benefit of lawyers and litigation funders, rather than class members, are not in the public interest.”
In that case, a settlement of up to £25m with one of the defendants resulted in only 7,290 valid claims totalling £216,725, while the class representative incurred costs of over £18.7m (read our article).
The Tribunal noted that the distribution plan in this case bore material resemblances to that in Gutmann: it envisaged notifying class members via a website; required class members to fill in a form to submit their claims; and the amounts class members were likely to recover were relatively small (loss per class member was estimated at between £1.61 and £8.77).
Failure to estimate likely level of take-up
The Tribunal criticised the PCR for failing to provide an estimated level of class member take-up. Applying the Gutmann uptake rate of 1% to the PCR’s estimates of harm (on a pessimistic, illustrative basis), the Tribunal noted that projected returns to the class would be between just £712,000 and £3.1m (including interest).
In contrast, the PCR's proposed litigation costs budget stood at £15.75m (plus VAT), excluding an ATE insurance deposit premium of £5.26m. Additionally – and as disclosed only following direct questioning at the hearing, which the Tribunal found troubling – a further 50% solicitor success fee, 30% counsel success fee, and up to £19.4m in contingent ATE premia could be added to the PCR’s costs. The Tribunal found that it was “wrong, and potentially misleading, not to present these contingent sums, alongside other legal costs, on the application for certification.”
Overall, the Tribunal held that the cost-benefit balance weighed strongly against certification. It accepted that where the cost-benefit analysis fell just on the wrong side of the line, that would not necessarily be an outright bar to the claim being certified. The Tribunal held, however, that “where an assessment of the evidence indicates that the cost-benefit balance is plainly against continuation of the proceedings it would not ordinarily be appropriate to certify those proceedings”.
Failure to explore synergies with the Asda and Tesco proceedings
The Tribunal also took issue with the PCR’s failure to explore cost savings by coordinating with the Asda and Tesco Proceedings, given that those claims will similarly seek to prove the existence of the alleged cartel and measure the size of any overcharge. As such, the interests of the proposed class would only diverge with those of the Asda and Tesco claimants when it came to the issue of pass-on.
The Tribunal noted that it was incumbent upon a class representative and its legal advisers to actively look for the most cost-efficient manner of pursuing litigation. In this case, the PCR could have either chosen to keep only a watching brief, aside from the question of pass-on, or to share resources with Asda and Tesco.
Authorisation condition: independence and remuneration scrutinised
The Tribunal also declined to authorise the PCR. It explained that considering whether the PCR would act fairly and adequately in the interest of class members requires, among other things, considering whether it has produced a satisfactory litigation plan (including addressing any relevant costs synergies from other proceedings). As the PCR failed adequately to balance the costs and benefits of the proceedings, it failed this requirement.
The Tribunal also expressed concerns with Ms Heal's remuneration of £300 per hour in her role as director of the PCR, with projected total charges of up to £316,950. The Tribunal observed that “class representatives self-authorising fees of this magnitude is undesirable and gives rise to a potential blurring of the lines between the interests of the class representative and the interests of the legal advisers and funders which they are required to scrutinise”. It also noted that it would expect class representatives’ remuneration to be more in line with work in the public sector. Should the matter progress, the Tribunal further stated that it would require further clarity on how the budgeted fees of £262,500 for the PCR’s advisory panel had been arrived at, the relevant skills of members of the advisory panel and how they inter-relate, and who on the panel was positioned to scrutinise costs as incurred.
A further opportunity
Despite refusing certification, the Tribunal declined to strike out the claim. It observed that there was scope for a significantly reduced costs budget, particularly if the PCR co-ordinated with the Asda and Tesco proceedings rather than pursuing its claim independently.
The Tribunal also invited consideration of more creative distribution mechanisms – potentially involving co-operation with Asda and Tesco – that could ensure that a high percentage of any damages reached class members.
A directions hearing was listed for the first available date after 13 May 2026, at which the PCR is expected to indicate whether it intends to make a further application and the scope of any revised proposals.
Implications
Waterside represents a significant development in the case law on the Tribunal's approach to certification. The outcome is particularly notable given that the underlying claim is a relatively straightforward one. It is clear that where distribution challenges are evident from the outset, they must be addressed at the certification stage. Where the cost-benefit analysis in light of likely take-up suggests an outcome predominantly for the benefit of lawyers and litigation funders, rather than class members, the CPO application may well be refused. This position appears to reflect public comments recently made by the Tribunal President, Mrs Justice Kelyn Bacon.
Class representatives must demonstrate a realistic pathway to delivering value to the class, and where parallel proceedings exist, cost synergies should be explored and evidenced. Finally, it can be expected that remuneration arrangements for class representatives and their advisory panels will continue to be closely scrutinised.
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