Tribunal gives green light for hauliers’ cartel compensation claim
The Road Haulage Association has crossed the first hurdle in what is expected to be a lengthy legal battle to secure compensation for truck operators hit financially as a result of the unlawful price-fixing cartel involving the major European truck manufacturers.
The Competition Appeal Tribunal (CAT) agreed entirely with the RHA that its funding arrangements and the provisions of its insurance documents are fit for purpose and will entitle the RHA to proceed with its collective claim.
The truck manufacturers, which the Tribunal confirmed had already been found to have participated in the cartel between 1997 and 2011, had tried to persuade the Tribunal that the RHA’s funding arrangement was contrary to legislation outlawing certain funding practices in the claims management field and that the Association did not have sufficient funding in place to bring the claim, and that the RHA did not have adequate legal insurance.
However, the Tribunal rejected all of these arguments and sided squarely with the RHA.
Richard Burnett, CEO of the RHA (pictured above, inset), said: “This is a very important milestone in what may prove to be a lengthy journey to recover compensation rightfully owed to truck operators."
The RHA said it was is delighted that the Tribunal has recognised the ability of the RHA as a “well-established trade association” to bring this collective claim, while at the same time rejecting outright attempts by the truck manufacturers to stifle the RHA’s claim at the outset.
"We are fully committed to seeing this process through to the end and it is a real achievement to have had such a clear victory at this early stage in the proceedings,” Burnett added.
The European Truck manufacturers (DAF, Daimler/Mercedes, Iveco, MAN, Scania, and Volvo/Renault) were found guilty of violating EU competition rules by the European Commission in 2016 and 2017 and fined over £3 billion in total. Over the 14-year period, the manufacturers at senior level fixed truck prices, agreed the cost that truck purchasers should be charged for emissions technologies (Euro 3, 4, 5, and 6), and delayed the introduction of more fuel-efficient emission technologies.
The Competition Appeal Tribunal in its 28 October 2019 judgment confirmed that the truck manufacturers had already been found to have participated in a cartel and that the cartel was long in duration, involved many manufacturers, and was extensive in scope. Indeed, the Tribunal pointed to the European Commission’s comment that the cartel participants accounted for 90% of all medium and heavy trucks sold in the EEA over the 14-year period of the cartel.
The RHA launched its collective claim in July 2018. The RHA cannot bring the collective claim as of right but must first apply to the Competition Appeal Tribunal for a collective proceedings order (CPO). That order will entitle the RHA to bring the collective claim on behalf of the UK’s road haulage industry. There are two parts to the process of applying for a CPO. First, it is necessary to persuade the Tribunal that the class representative can be authorised to bring the collective claim (the authorisation part) – this includes examination of the funding and insurance arrangements the proposed class representative has put in place. Second, it is necessary to persuade the Tribunal that the claims proposed for inclusion in the collective proceedings are eligible to be brought in collective proceedings (the certification part).
The Tribunal has now ruled in favour of the RHA on the first part of the RHA’s CPO application. The second part of the CPO application process is being delayed because another CPO application is on appeal to the Supreme Court and the Supreme Court’s judgment in that other case may impact on how the Tribunal approaches the RHA’s CPO application. The Supreme Court will hear the appeal in the other case in May 2020 and give judgment a few months afterwards. The RHA would therefore expect the second part of its CPO application to be heard by the Tribunal around October 2020 with judgment following a few months afterwards.
The RHA’s proposed collective claim covers all trucks over 6 tonnes of any make and not just the makes of trucks owned by the cartel members. The RHA is claiming for trucks sold both during the cartel period (1997 to 2011) and afterwards to the present day. The claim also covers new and second-hand trucks.
The RHA’s claim relates not only to trucks purchased or leased in the United Kingdom but also to trucks purchased or leased in other European countries provided the operator belongs to a group of companies that purchased or leased trucks registered in the United Kingdom.
UK Trucks Claim (UKTC) is also seeking to bring a collective claim on behalf of truck operators. UKTC does not appear to have any claimants signed up to its proposed claim at this point in time. Moreover, UKTC’s claim is less extensive than the RHA’s claim as it does not cover (a) second-hand trucks, (b) trucks purchased and leased to the current day, (c) trucks purchased and leased outside the UK, and (d) additional fuel costs caused by the cartel.
The RHA expects the claim to run for several years but is confident that compensation will be awarded in due course.
Further information on the RHA’s collective claim can be found at www.truckcartellegalaction.com.
Posted on: November 4th 2019