Following a decision issued on 30 October 2014, the Commercial Court of England and Wales ("CC") has denied a request made on behalf of a number of UK retailers (Arcadia, Asda, B&Q, Comet, Debenhams, House of Fraser, Iceland Foods, New Look Retailers, Next Retail, Record 2 Shop, WM Morrison, and Argos) to appeal against its judgment in which a period of 30 years was struck out of potential damages from their lawsuit against payment card group Visa. The retailers are now seeking permission to appeal directly from the Court of Appeal ("CoA"). The appeal hinges on the issue of when limitation periods start running once the relevant facts are available to the claimant(s) to pursue a damages claim following a competition law infringement. In this case, the claimants argued that they did not have access to all the relevant information, i.e., specific knowledge of Visa's conduct, needed in order to "trigger" the running of the limitation clock. The decision of the CoA as to whether or not to grant leave to appeal will have serious implications for future damages claims in the UK, particularly in light of the recent adoption of the EU Directive on Antitrust Damages Actions (the "EU Directive" – See VBB on Competition Law, Volume 2014, No. 11, available at www.vbb.com).
The UK retailers first brought their claims against Visa in a lawsuit filed in London with proceedings commencing on 23 July 2013. All well-known high-street brands, the retailers were claiming damages from Visa for its alleged excessive multilateral interchange fees ("MIFs") imposed on merchants in the UK, EEA and Ireland. MIFs are fees which merchants are subject to for every transaction carried out by a customer using a payment card. The fees are charged by the cardholder's bank to the merchant's bank per transaction and the fees are set throughmultilateral agreements between member banks. However, in the case of payment schemes involving Visa, in the absence of a multilateral agreement between banks, the charge defaults to fees set by Visa. It was this issue upon which the retailers claimed that the MIFs amounted to a breach of competition law under Article 101 of the Treaty on the Functioning of the European Union (TFEU), s. 2 of the Competition Act 1998 and/or s. 4 of the Irish Competition Act 2002. Furthermore, the claims against Visa covered a period of 37 years, taking account of all payments made under these types of agreements since 1977.
In fact, the payment card market in general has already drawn attention from competition authorities in Europe, causing the European Commission to initiate antitrust investigations into practices concerning MIFs carried out by MasterCard and Visa. In February 2014, following a lengthy investigation into Visa, the Commission finally ended its probe with no formal finding that Visa had violated competition rules after accepting Visa's commitments to significantly cut its MIFs in order to facilitate cross-border competition. In contrast, on 11 September 2014, the EU Court of Justice confirmed the Commission's findings that MasterCard's interchange fees were restrictive of competition in the Internal Market, and thereby in breach of EU competition rules.
Counsel for Visa claimed that it was this EU Court of Justice judgment that prompted the retailers' action rather than the "discovery of a new fact" as the retailers were not able to produce evidence of any new relevant facts coming to light between the period of 2007 and 2013. Thus, they could not prove that there was any material fact they had discovered after 2007 – about Visa's alleged anti-competitive practices – that was unknown to them prior to 2007.
The CC chose to side with Visa in its argument that any damages claims prior to 2007 are in fact time-barred under the Limitation Act 1980 which provides that claims in civil cases may not be brought later than six years from the date on which the cause of action accrued.
However, the point of law that the retailers were seeking to rely on was that in cases where the cause of action is concealed, time does not begin to run until either the claimant(s) discovered the damaging behaviour or could have been reasonably expected to discover it. The retailers argued that the limitation period could not have been triggered as Visa had deliberately concealed information and in fact continue to conceal relevant facts, which impeded the retailers' ability to bring their claims earlier. These allegedly concealed yet relevant facts were particularly concerned with the secrecy surrounding: (i) how the MIFs were set; (ii) the precise nature and scope of such arrangements; and (iii) the levels at which they were applied. Further, the retailers claimed that the limitation period could not commence until they were made aware of all the required facts.
Counsel for Visa countered that the initiation of the Commission's investigation had brought enough 'relevant facts' forward – within the meaning of the Limitation Act 1980 – to start the running of the limitation period. Visa further argued that this was a publicised case rather than a 'secret cartel', meaning that the facts of the case had been in the public domain for a period of more than six years before the claims were brought.
The judges in the case accepted Visa's arguments and considered that the retailers did have sufficient relevant facts to initiate a prima facie claim, which they had done. Therefore, the CC held that the limitation period had run out for any claims on infringements prior to 2007. On 11 November 2014, the same court denied the retailers' request to appeal against the decision. As a result, the retailers are seeking leave to appeal directly from the CoA.
The case raises an interesting point of law regarding the calculation of limitation periods in cases concerning purported deliberate concealment of material facts in the wake of the EU Directive, which was formally adopted on 10 November 2014 and must be implemented by Member States into national law within two years. As counsel for the retailers cautioned, this is a new area of the law to be explored by the courts – the effect of the Limitation Act 1980 in the context of a competition claim.
Under Article 10, the EU Directive outlines the rules applicable to limitation periods, namely that a limitation period shall not begin to run before the cause of action has ceased and the claimant either knows or can be reasonably expected to know of: (i) the concerned behaviour and the fact that it amounts to an infringement of competition law; (ii) the fact that the infringement caused harm to the claimant; and (iii) the identity of the infringer. Moreover, the limitation period for bringing an action must be at least five years. Finally, the limitation period must be suspended if a national competition authority takes action in initiating an investigation in regards to a competition law infringement which relates to the damages action. Such a suspension will come to an end at the earliest one year after the infringement decision becomes final or after the proceedings have been otherwise terminated. Following the UK judgment, counsel for the retailers reasoned that it was "contrary to EU law and leads to an extraordinary situation where competition-law infringers are incentivised to conceal facts relevant to victims' damages claims". As the clock is already figuratively running, only time will tell how the UK courts will choose to deal with this matter and how far aligned that approach will be with EU law.
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