Too Many Cooks? The CMA and the Concurrent Regulators

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Baker & McKenzie LLP is a member firm of Baker & McKenzie International, a Swiss Verein with member law firms around the world. In accordance with the common terminology used in professional service organisations, reference to a "partner" means a person who is a partner, or equivalent, in such a law firm. Similarly, reference to an "office" means an office of any such law firm.

Too Many Cooks? The CMA and the

Concurrent Regulators

Junior Competition Conference, 31 Jan 2014

Colm O’Grady

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The Scope of Concurrency

–

Competition Act 1998: Chapter I and Chapter II

–

Treaty on the Functioning of the European Union:

Article 101 and Article 102

–

Enterprise Act 2002: Part 4 (Market Investigation

References)

–

For the avoidance of doubt: no control over mergers.

No ability to enforce the criminal cartel offence (s188

Enterprise Act 2002)

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The Concurrent Regulators (at 1 April 2014)

3

Civil Aviation Authority Monitor NIAUR OFCOM OFGEM OFWAT ORR

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CA98 Infringement Decisions/MIRs by

Regulators

–

CA98



English Welsh & Scottish Railway Ltd (ORR)



National Grid plc (OFGEM)



Albion Water* (CAT)

–

MIRs



Pay TV Movies (OFCOM)



ROSCOs (Rolling Stock Operating Companies) (ORR)

*following non-infringement decision by OFWAT

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Enterprise & Regulatory Reform Act: Key

Reforms

–

Primacy

–

Case Allocation

–

Annual Report

–

The “nuclear option”

–

UKCN

–

Resources

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Concurrency: The Future

–

More concurrent regulators

–

Are the cases out there?

–

The impact of primacy

–

The role of the CMA

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The CMA – Serious about Regulated

Sectors?

–

The Carrot:

“Under the proposed reforms, we will work more closely

than ever with the sector regulators. The regulated sectors

form some of the most important parts of the economy,

and it is vital that competition works well within them…”

–

And the Stick:

“…we should be clear: if greater cooperation does not

work, the Authority must be willing and able to exercise its

powers if sector regulators fail to do so.”

Lord Currie, 5 Dec 2012

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Baker & McKenzie LLP is a member firm of Baker & McKenzie International, a Swiss Verein with member law firms around the world. In accordance with the common terminology used in professional service organisations, reference to a "partner" means a person who is a partner, or equivalent, in such a law firm. Similarly, reference to an "office" means an office of any such law firm.

Thank you

Colm O’Grady

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Jurisdictional

Issues in UK Cartel

Damages Claims

Paul Stuart, Cleary Gottlieb Steen & Hamilton LLP 8th _{Junior Competition Conference, 31 January 2014}

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Brussels I

Regulation

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UK-domiciled

addressee

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Article 2

Article 6

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Damage suffered

in the UK

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Article 5(3)

Dumez France

Deutsche Bahn

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Provimi

Cooper Tire

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Reisch Montage

Bord Na Mona

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8th Junior Competition Conference, 31 January 2014

Jurisdictional Issues in UK Cartel Damages Claims

Paul Stuart, Cleary Gottlieb Steen & Hamilton LLP

Selected Bibliography

Legislation

Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters [2001] OJ L 12/1

European Case Law

Case 21/76 Bier v Mines de Potasse d’Alsace SA [1976] ECR 1735 Case C-68/93 Shevill v Press Alliance [1995] ECR I-415

Case C-220/88 Dumez France SA and Tracoba SARL v Hessische Landesbank and others [1990] ECR I-49 Case C-196/99 P Siderurgica Aristrain Madrid SL v Commission [2003] ECR I-11005

Case C-103/05 Reisch Montage AG v Kiesel Baumaschinen Handels GmbH [2006] ECR I-6827 Case C-352/13 CDC Hydrogen Peroxide v Evonik Degussa GmbH and others [2013] OJ C298/2

English Case Law

Roche Products Ltd. & Ors v Provimi Ltd [2003] EWHC 961 (Comm)

Cooper Tire & Rubber Co & Ors v Shell Chemicals UK Ltd & Ors [2009] EWHC 2609 (Comm)

Cooper Tire & Rubber Company Europe Ltd & Ors v Dow Deutschland Inc & Ors [2010] EWCA Civ 864 Toshiba Carrier UK Ltd & Ors v KME Yorkshire Ltd & Ors [2011] EWHC 2665 (Ch)

Nokia Corporation v AU Optronics Corporation & Ors [2012] EWHC 731 (Ch) KME Yorkshire Ltd & Ors v Toshiba Carrier UK Ltd & Ors [2012] EWCA Civ 1190

Bord Na Mona Horticulture Ltd & Anor v British Polythene Industries Plc & Ors [2012] EWHC 3346 (Comm) Deutsche Bahn AG & Ors v Morgan Advanced Materials Plc & Ors [2013] CAT 18

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8th _{Junior Competition Conference}

Fast track injunctions in

private competition

disputes

31 January 2014

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31 January 2014 / 8th_{JCC - Fast track CAT injunctions}

Agenda

Welcome

The Fast Track

Government

proposals

(Stop Press)

Finish

Dahabshiil

IPEC

&

Thoughts

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1. Introduction – context

CAT to be “major venue” for competition actions

• Stand-alone actions

• Opt-out collective actions

• Injunctions (except Scotland)

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1. Introduction – why a fast-track?

=

+

SME DomCo

Government aim: empower SMEs to challenge

anti-competitive behaviour via injunctive relief

Slow Expensive Risky

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2. The proposals – what will the fast-track look like?

• Features:

• Speedy

• Cost caps

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2. The proposals – which cases get fast-tracked?

• Suitability:

• Chair decides

• Presumption & factors

• Precedents

• Simplicity?

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3. The proposals – experience in the IP field

IPEC

• Damages < £500k; costs < £50k

• Heavy written pleadings

• Active case management

• Telephone applications; 1 or 2 day trial

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3. The proposals – initial thoughts

Thoughts

• Crucial first CMC

• More substantive rulings

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4. Case study – preliminary injunctions

• American Cyanamid:

• real prospect of success

• granting PI carries least risk of injustice

(irremediable harm)

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4. Case study – Dahabshiil v Barclays

[2013] EWHC 3379 (Ch)

Money laundering

Somalia

Fines

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5. Q&A

Queries

• How to formulate injunction?

• Cross-border implications: e.g. unbundling?

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Thank you

Bristows LLP 100 Victoria Embankment London EC4Y 0DH T +44(0)20 7400 8000 F +44(0)20 7400 8050 [email protected] www.bristows.com 25132883

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Tom Bolster, Associate Hausfeld & Co LLP 31 January 2014

The structure and funding of competition

claims post‐Jackson – ‘all change’ or

‘status quo’?

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• Address some of the important practical and commercial considerations

that go to the bringing of competition litigation in the UK.

• In particular we will cover:

 How conditional fee agreements (CFAs) and damages based agreements (DBAs) will work in the post‐Jackson world;

 The strategic impact of the reforms in this area from both the Claimant and the Defendant’s perspective; and

 The likely interaction between DBAs and case funding in the post‐Jackson world.

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The

Jackson

Reforms

on

funding

‐

an

overview

• The reasons for reform – to control costs and promote access to justice (see

Jackson LJ’s

Review of Civil Litigation Costs

‐

January 2010).

• Three key areas of reform:

 Changes to CFAs – especially the recoverability of success fees;

 Rolling out of DBAs – beyond just employment claims; and

 Changes to the treatment of ‘after the event’ (ATE) insurance premia.

• The relevant Legislation:

 Primary – Sections 44 – 46 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (amending the Courts and Legal Services Act 1990); and

 Secondary – The Conditional Fee Agreements Order 2013 (SI 2013 No. 689) and The Damages‐Based Agreements Regulations 2013 (SI 2013 No. 609).

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CFAs

&

DBAs

– what

they

are

&

why

it

matters

CFA

• “

A conditional fee agreement is an agreement with a person providing

advocacy or litigation services which provides for his fees and expenses, or

any part of them, to be payable only in specified circumstances

” (s58(2)(a)

CLSA 1990).

• If CFA contains a success fee additional rules apply e.g. it must state the

percentage by which base costs are to be increased (s58(4)(b) CLSA 1990).

DBA

• More commonly referred to as a contingency fee, it provides for a

percentage of the sums recovered from the litigation to be deducted by the

lawyer on success but no fee arises if the action fails.

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Summary

of

the

reforms

to

CFAs,

DBAs

&

ATE

• CFA‐ reforms only affect CFAs entered into after 1 April 2013 (s44(6) LASPO 2012):

 Success fee is still recoverable but only from the client not the Defendant (s44(4) LASPO 2012); and

 Maximum level of success fee in non‐PI claims is still 100% (art.3 CFAO 2013).

• DBA ‐ solicitor can receive up to 50% (incl. VAT) of the client’s damages on success i.e. a contingency fee, but:

 Any solicitors’ fees and Counsel’s fees recovered from the Defendant must be deducted from the contingency fee to which the solicitor would otherwise be entitled;

 Contingency fee acts as a cap on the amount recoverable from a Defendant;

 Other “expenses” e.g. expert fees can be recovered from the client in addition to the contingency fee to the extent not recovered from the Defendant

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Likely engagement

structures

post

‐

Jackson

• CFAs will remain the engagement structure of choice for firms willing to

take on cases on a no

‐

win no

‐

fee basis.

• This will be the case despite the non

‐

recoverability of CFA success fees from

the Defendant because of:

 The complexity and lack of certainty for clients of the DBA regime;

 The high level of risk of DBAs for solicitors if the claim is of low/medium value;

 The difficulty of predicting the likely claim value at the outset of a case;

 The difficulty of predicting the likely duration of the litigation at the outset; and

 The difficulty of predicting the likely case funding needs at the outset.

• DBAs are likely to be limited to extremely high value claims and/or claims

which are expected to settle early.

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DBAs

&

case

funding

in

the

post

‐

Jackson

world

• DBAs, if used, may well be combined with a commitment to fund the litigation and/or to take on the risk of paying the other side’s costs.

• The funding commitment may then be met by the solicitors themselves or outsourced to a third party litigation funder.

• Similarly the solicitors may agree to take on the adverse costs risk themselves or may outsource this to an ATE insurer.

• Either way the claimant solicitor’s DBA percentage will need to be very high (50% may not be uncommon) in order to budget for:

 A fair financial reward for the solicitors, taking into consideration the amount of time they will put into the case and the amount of risk they are taking on;

 The ATE insurance premium or the adverse costs risk if the solicitor is taking on that risk;

 Counsel’s fees which are included within the contingency fee under the current rules;

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Practical impact

for

Claimants

&

Defendants

• The relevance of the reforms – Claimant firms only?

• The practical impact for

both

Claimant and Defendant firms:

 It will be much harder for Claimant firms to take on lower value claims due to the non‐recoverability from the Defendant of the ATE insurance premium;

 In settlement discussions Defendant firms should not assume that Claimant firms will obtain the same fee whether or not the Defendant pays their base costs (as would happen under a DBA);

 Conversely Claimant firms, acting under CFAs, will continue to push hard for Defendants to pay as much of their base costs as possible; and