It has been a long time since I left Luxembourg and the EC. In that time I have moved to Guernsey and worked on the investigation of a major insurance firm by Guernsey’s market regulator (the GFSC), I have moved to Indonesia and qualified as a Dive Master (http://www.trawangandive.com), I have moved to London, started my training contract, completed a beasting in Finance for my first seat and moved back into EU law for my second seat and been asked to move back to Luxembourg for my third seat (in International Funds this time). So now that the loop has come nearly full circle, I feel that I really should stick to at least one new year’s resolution and start re-contributing to this blog….
Let’s (re)start in a briefer, more practical tone then we left off. To what extent can parties in a follow on claim for damages utilise the regulator’s finding of fact?
The first case which considered the application of s58 of the Competition Act 1998 (the “Act”) culminated with the Court of Appeal’s decision in the Enron Coal Services Ltd (In Liquidation) v English Welsh & Scottish Railway Ltd  case in January 2011. This case has been cited and followed in six subsequent cases, including most recently the Cardiff Bus decision. Journal articles focusing on s58 have however focused on Enron, as despite the fact that Cardiff Bus thoroughly engaged with and confirmed Enron’s findings, Cardif is focused on for its granting “exemplary damages” in follow-on cases (whose award in Cardiff Bus was a first for English law).
The case law and commentary on s58 of the Act and Enron consistently agree on the following;
(i) that references to “court” in s58 should be read to include the CAT, when acting as a court with Pt I proceedings before it;
(ii) findings of fact are binding if “to challenge them would be tantamount to challenging the finding of infringement” Findings of fact my include those findings;
(iii) this does not apply to findings that are “peripheral or incidental.” Rather, the Court held that the party seeking to rely on a statement in a regulator’s decision must demonstrate that the regulator has made “a clearly identifiable” finding of fact to a given effect, and that “it is not enough to be able to point to passages in the decision from which a finding of fact might arguably be inferred”;
(iv) as a finding of infringement does not require proof that loss has been caused to another undertaking, the fact that an infringement has been established does not demonstrate that such loss has taken place; and
(v) causation and loss need to be assessed in a follow-on action applying the same standard of proof as in any other civil claim for damages.
That is, the CAT is bound by a finding of OPR/a Regulator as to findings of fact, unless the regulator has directed otherwise. When findings are not directly relevant to the finding of infringement, s.58 gives them binding effect, subject to the power of the court or CAT to disapply that effect. Should such a direction be made, it is open to the parties to prove the fact by evidence in court in the ordinary way.
NOTE: Some commentators have noted that the decision in Enron is anomalous in that it appears to entrust the CAT to decide whether an infringement had been committed when a case is appealed from a regulator, but simultaneously restricts the CAT from making such an assessment when it comes to a claim for damages. As such it has been suggested that the case may prompt further discussions as to whether the inter-relationship between the jurisdiction of the court and that of the CAT in relation to damages may merit reassessment. Nonetheless, the six cases subsequent to Enron have declined to address this issue further, and as such it is probably a moot point of little practical concern to most cases.