The Court of Appeal dismissed appeals in Arcadia Group Brands and others v Visa Inc and others, and upheld the decision by Simon J in the High Court ([2014] EWHC 3561 (Comm)) to strike out claims for damages of around £500 million by a number of well-known high street retailers, including Asda, B&Q, Debenhams and Argos against Visa.
This case has important ramifications in respect of the limitation period for competition law damages claims and the circumstances in which indemnity costs may be awarded.
The key points in the judgment are as follows:
- The Judge had not wrongly applied the “statement of claim” test set out in Johnson v Chief Constable of Surrey Times (CA, unreported, November 23, 1992) when striking out the retailers’ claims pursuant to Section 9 of the Limitation Act 1980.
- Section 32(1)(b) of the Limitation Act 1980 is concerned with facts which relate to the prime facie case, not those which improve the prospect of success in a claim or are broadly relevant to a claimant’s case. Section 32(1)(b) is to be construed narrowly.
- Facts relevant to the issue of exemption under Article 101(3) of the Treaty on the Functioning of the European Union are not “relevant facts” and so any concealment of such facts does not stop time running.
- Notwithstanding their complexity, competition law damages claims do not fall within an exceptional category calling for a different approach to the application of Section 32(1)(b).
- A six-year limitation period for competition law claims, with the benefit of Section 32(1)(b) postponement, is not incompatible with the EU principle of effectiveness. The recently enacted Damages Directive has no application to the present case and does not merely give effect to the existing law. The EU law position is clear and there is no basis for a reference to the Court of Justice of the European Communities.
- The Judge has a wide discretion regarding costs. However, in this instance, he had erred in awarding costs on the indemnity basis. The weakness of a legal argument is not a justification for an order for indemnity costs, which is penal in nature. The position might be different if proceedings or steps taken within them are not only based on a clearly hopeless case, but are also driven by an ulterior commercial or personal motive, or for a tactical purpose unrelated to a real belief in the merits of the case. Consequently, the Court of Appeal allowed the retailers’ appeal against the costs order.
[Arcadia Group Brands and others v Visa Inc and others [2015] EWCA Civ 883]
