UK: BCL Old Co Limited & Ors v BASF SE & Ors [2010] EWCA Civ 1258

Last Updated: 22 November 2010
Article by Clare Canning, Alexander Weinberg and Gillian Sproul

Originally published 12 November 2010

Keywords: BCL Old Co Limited, Ors, competition damages, extension of time

Competition Damages – No Discretionary Extension of Time for Follow-On Claims

In a judgment delivered on 12 November, the Court of Appeal dismissed an appeal by the Claimants for an extension of time in which to bring follow-on claims for damages against members of a 1990s cartel found by the European Commission in 2001 to have infringed EU competition rules in the market for vitamins A, E and B2.

These claims had already been found by the Court of Appeal to be time-barred ([2009] EWCA Civ 434) and the CAT had refused the Claimants' subsequent request that it use its discretion to lift the time bar in their case ([2009] CAT 29).

This case provides important clarification of the CAT's powers in such circumstances. It indicates that the CAT does not in fact have a power under its Rules to extend time for bringing proceedings under section 47A of the Competition Act 1998 ("s47A"). Consequently, the time limit under Rule 31 for bringing follow-on damages claims, the second anniversary of a Commission decision finding an infringement, or a final appeal upholding an infringement decision, will be determinative.

Background

In 2001, the European Commission fined several vitamin manufacturers for their participation in a worldwide price-fixing and market-sharing cartel, in breach of Article 81 (now 101) of the EU Treaty. The decision was formally adopted in January 2002.

BASF, one of the companies fined by the European Commission, appealed not against the infringement decision itself, but against the level of the fine imposed. Judgment on that appeal was handed down by the Court of First Instance on 15 March 2006. BASF had until 25 May 2006 to lodge a further appeal, to the European Court of Justice, but chose not to do so.

Under s47A once the European Commission has issued a decision finding that an infringement has taken place, a person who has suffered loss as a result of that infringement may bring a "follow-on" claim for damages before the CAT. S47A provides that any application must be made in accordance with the CAT's Rules - Rule 31 states that a claim for damages must be made within a period of two years of the decision, unless it is appealed, in which case time runs from the date on which the appeal process is exhausted.

Facts

BCL lodged s47A claims against BASF on 12 March 2008. BASF submitted that these claims had not been brought within the limitation period, which had expired in 2004, two years after the date of the original Commission decision. Following a preliminary issue hearing, the CAT ruled on 25 September 2008 that the two-year limitation period had begun on the date when BASF's time for appealing the Court of First Instance's decision had expired, namely 25 May 2006, and that the claims were therefore in time.

The CAT refused BASF permission to appeal against this preliminary issue ruling. The Court of Appeal, however, granted permission and allowed the appeal. It subsequently held, on 22 May 2009, that the claims were out of time since on the plain and ordinary meaning of s47A, only challenges to the infringement element of the Commission decision, not challenges to the level of the fine imposed, were relevant to a determination of when the two-year limitation period began to run.

The Court of Appeal also noted, however, that under Rule 19(2)(i) of the CAT Rules, the CAT had the discretionary power to extend the two-year time limit in Rule 31.

The Claimants therefore applied to the CAT for a discretionary extension of the limitation period to allow them to bring their s47A claims. They argued that they should not be precluded from advancing their claims on account of a self-evidently reasonable mistake - shared by the CAT in the preliminary issue hearing - about when the two-year limitation period actually expired. The CAT refused to extend time on the ground that whilst the Claimants had made a reasonable mistake as to when the limitation period expired, they had not acted reasonably promptly once they thought the window for claiming had opened.

Decision

The Court of Appeal was asked to decide whether, on its true construction, Rule 19(2)(i) gave the CAT power to extend time. If there was no such power, the Claimants invited the Court of Appeal to determine whether such a power should be treated as existing in the present case by reason of EU law principles. Finally, if the Court of Appeal found that there was such a power, it had to decide whether the CAT's refusal to exercise that power in the Claimants' favour was a proper exercise of its discretion, either as a matter of UK or EU law.

The Court of Appeal concluded that, on their true construction, the CAT Rules did not contain a general power to extend time and dis-apply the two year limitation period. Further, the power to extend time under Rule 19(2)(i) was plainly limited in scope to case management directions, not least given its location in the section of Part II of the Rules headed "Case Management". In any event, the terms of Rule 19(2)(i) did not read as if they were intended to create a general power to extend time for bringing proceedings, rather than a case management power. The Court of Appeal also rejected the Claimants' arguments that such a power should be treated as existing in this case as a result of the overriding effect of EU law. Consequently, there was no need to consider whether the CAT's refusal to extend time was a proper exercise of its discretion. That was no longer an issue since it concerned the exercise of a discretion that the Court of Appeal held did not exist.

Comments

This is a key decision for both Claimants and Defendants. It creates certainty around the scope of the CAT's general powers to extend the period for bringing otherwise time-barred follow-on damages claims. In short, the CAT has no such power. Expiry of the two year limitation period specified in Rule 31 is therefore a definitive bar to such claims.

Defendants will take comfort in that. They will not now face potentially open-ended litigation surrounding the exercise of a perceived discretion by the CAT to extend time and the prospects of then having to defend the underlying damages claim itself. As the CAT noted when refusing to extend time, "even "dirty dogs" eventually can sleep at night". Claimants will also benefit from the certainty provided by this decision, not least because they will avoid the costly expense of pursuing claims out of time.

It remains to be seen whether BCL will seek permission to appeal to the Supreme Court. For now, however, the judgment ends the uncertainty surrounding the manner in which the CAT will tackle follow-on damages claims brought out of time.

Mayer Brown International LLP acted for BASF in this case.

Learn more about our Litigation & Dispute Resolution practice.

Visit us at www.mayerbrown.com.

Copyright 2010. Mayer Brown LLP, Mayer Brown International LLP, Mayer Brown JSM and/or Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. All rights reserved.

Mayer Brown is a global legal services organization comprising legal practices that are separate entities (the Mayer Brown Practices). The Mayer Brown Practices are: Mayer Brown LLP, a limited liability partnership established in the United States; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales; Mayer Brown JSM, a Hong Kong partnership, and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.

This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.