In a procedural first that will probably be of nice curiosity to the category motion market, the Competition Appeal Tribunal (CAT) will probably be requested to approve a settlement in an opt-out collective motion (referring to automobile supply fees) later this 12 months.
Background to collective proceedings orders
The collective proceedings order regime for competitors damages actions was established in 2015 and permits such instances to be introduced on both an “opt-in” or “opt-out” foundation. Unless they expressly select to opt-out, all members of the category upon whose behalf the motion is introduced are occasion to opt-out proceedings, whereas any class member who needs to be a part of opt-in proceedings has to actively select to affix them. Collective proceedings should be commenced by a person who proposes to be the consultant in these proceedings, albeit they don’t have to be a category member themselves (so long as the CAT is happy that it’s simply and affordable for them to be the category consultant).
Crucially, to ensure that any case to proceed as a collective motion, it needs to be licensed by the CAT by the use of a collective proceedings order. As a part of that course of, the CAT will resolve whether or not the proceedings in query ought to proceed as a collective motion in any respect. Claims are eligible for inclusion in collective proceedings provided that the CAT considers that they elevate the identical, comparable or associated problems with truth or legislation and are appropriate to be introduced in collective proceedings. The CAT may also must resolve whether or not any collective proceedings order ought to be made on opt-in or opt-out foundation which includes a consideration of:
- the energy of the claims
- whether or not it’s practicable for the proceedings to be introduced as opt-in collective proceedings, having regard to all of the circumstances, together with the estimated quantity of damages that individual class members could recuperate.
Settlement of collective proceedings
Collective proceedings orders additionally elevate fascinating questions round settlement and the process differs relying on whether or not the proceedings are opt-in (the place the CAT’s approval just isn’t required) or opt-out (the place it’s). That is as a result of in opt-in proceedings each represented class member would have been recognized and in principle capable of give directions to the category consultant. However, in relation to opt-out proceedings, not each class member could have been recognized and so the CAT’s approval is required for any settlement as a result of it could have an effect on the pursuits of all class members. If a collective settlement approval order is made, that settlement would then bind all UK-domiciled class members who haven’t opted out to the phrases of the settlement. However class members not domiciled within the UK should actively choose into the settlement.
In deciding whether or not to make a collective settlement approval order, the Tribunal will think about whether or not the settlement is “simply and affordable” for the category members, having regard to plenty of components, together with:
- The quantity and phrases of the settlement.
- The variety of estimated variety of individuals prone to be entitled to a share of the settlement.
- The chance of judgment being obtained in collective proceedings for an quantity considerably in extra of the quantity of the settlement measurement of the category coated by the settlement.
- The possible period and prices of the collective proceedings in the event that they proceeded to trial.
The CAT’s determination and the way it offers with these issues when listening to the appliance in early December will subsequently be of explicit curiosity to competitors litigators.
