Anti-cartel claim proceeds

Posted: 3rd October 2012

A group of companies which claims it was substantially overcharged for goods as a result of an anti-competitive cartel amongst some of its suppliers has been granted permission to proceed with its compensation claim.

Building Site Scaffold PolesIn refusing to strike out the claim, the Court of Appeal has emphasised that any acts of implementation or concerted practices carried out pursuant to and with knowledge of an anti-competitive agreement are capable of founding a valid damages claim.

The claims, by Toshiba Carrier UK and others, relating to alleged breaches of the anti-cartel provisions contained in European and domestic law, were launched following a decision of the Commission of the European Union that, between 1988 and 2001, there had been in existence various agreements and concerted practices consisting of price fixing and market sharing in the industrial tubes sector.

Various defendants in the case argued that the claims should be struck out on grounds that the claimants had failed to plead any arguable cause of action; that there was a complete lack of evidence to support key allegations and that the proceedings in general had no real prospect of success.

It was argued that the implementation of an unlawful anti-competitive agreement reached between others was not enough to found a damages claim even if that implementation was carried out with knowledge of the agreement.

However, in upholding a judge’s earlier refusal to strike out the claim against KME Yorkshire Ltd, Lord Justice Etherton said that authority appeared to establish that even indirect or isolated instances of contact between competitors may be sufficient to breach anti-cartel rules if their objective is to promote artificial market conditions.

The judge, sitting with Lords Justice Ward and Tomlinson, added: ‘What is also clear…is that acts of implementation alone are capable of amounting to concerted practices where they are carried out pursuant to an anti-competitive agreement made between others and with knowledge of that agreement’.