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Truck Cartelists’ Appeal on Preliminary Issue Dismissed

On 19 July 2016 the European Commission decided that a number of truck manufacturers had infringed competition rules by collusive arrangements on pricing and gross price increases in the EEA for medium and heavy trucks, and on the timing and the passing on of costs for the introduction of mandatory emission technologies. The infringement covered the entire EEA and lasted from 17 January 1997 until 18 January 2011.  The Decision was adopted in accordance with the Commission’s settlement procedure which applies where parties admit the infringement alleged and may be rewarded with a 10% reduction in fines for doing so.  In this case the truck cartelists took advantage of the settlement procedure.  The Decision recorded that “[t]he facts as outlined in this Decision have been accepted by MAN, Daimler, Iveco, Volvo and DAF…in the settlement procedure.”

In follow-on damages actions against the truck manufacturers, the claimants, who bought or leased trucks during the period of infringement, claim compensation for alleged unlawful inflation of the prices of trucks arising from the infringement. The question before the Court of Appeal was whether it is an abuse of process for the truck manufacturers, in defending those actions, to put the claimants to proof of facts set out in the Decision, which the truck manufacturers admitted to settle the Commission’s investigation.

The Court of Appeal (the Chancellor, Flaux LJ and Rose LJ) upheld the decision of the CAT, dismissed the truck manufacturers appeal, and ordered them to pay costs.  The Court held (at [64]) that there was nothing in Article 16 of Regulation 1/2003 that precludes the application of the principle that it can be an abuse of process to contest a finding set out in a settlement decision even if it would not be a breach of Article 16 for the domestic court to hold ultimately that the finding was wrong.  There was no breach of the rights of defence or the presumption of innocence to hold the truck manufacturers to their admissions.  The application of English law which prevents the non-essential, admitted facts published in the Settlement Decision from being contested by the truck manufacturers did not breach Articles 47 and 48 of the Charter (at [79]).  Nor did application of the abuse of process doctrine undermine the settlement process in breach of the EU duty of sincere cooperation (at [85]).

The Court was sufficiently confident in the answers to the questions to dispose of the appeals without making a reference to the Court of Justice (at [87]); the Chancellor, in a concurring judgment, said that the questions of EU law were acte claire (at [147]).  Finally, on the domestic law grounds of appeal, the Court held that the Commission’s Decision was a ‘final decision’ so the abuse of process doctrine was properly engaged; the CAT was “entirely justified” in concluding that it would create great unfairness to the claimants to have to prove facts the truck manufacturers had already admitted in settlement proceedings, and that it would “be an affront to most people’s ideas of justice” for the truck manufacturers “to be allowed to resile from the admissions and put the claimants to proof of those admitted facts” (at [107].

The full judgment in AB Volvo (Publ) & Ors v Ryder Limited and Ors [2020] EWCA Civ 1475 is available here and the full judgment of the CAT [2020] CAT 7 is available here.

Derek Spitz, instructed by Ashurst LLP, appeared for the successful Ryder claimants.