On 5 October 2023 Herbert Smith Freehills hosted the CGR Live Competition Litigation conference at the London office, with a distinguished line-up of expert speakers and panellists, including Kim Dietzel, co-head of Herbert Smith Freehills' competition litigation practice.

As in previous years, the conference provided an excellent opportunity to explore some of the current key themes in competition litigation. Highlights from the discussions are summarised below.

The role of expert evidence

In his keynote address Derek Ridyard, economist and Competition Appeal Tribunal (CAT) panel member, focused on the role of expert evidence in competition litigation and the challenges raised by complex evidence.

The expert process can add great value if handled well but there are a number of key points to bear in mind. In every competition law case there are valid arguments on both sides, but a good expert should not only focus on their report but should consider both sides, the gap between them and where the ultimate solution between the two should come out.

The courts need help from the experts when dealing with a range of conflicting claims, and experts need to consider their duty to assist the court from the start. The court wants to see some kind of convergence, an understanding of the two expert reports, and requires assistance to work out where in the range between the two reports the level of damages should be. The expert evidence ultimately needs to head towards convergence.

Ridyard concluded with four key points of advice for experts and their clients:

  • Step outside your bubble and keep a sense of perspective. Identify and anticipate the point of convergence between the two good reports before you get hung up over how marvellous your own report is.
  • Address the tensions and contradictions between the factual evidence and the expert evidence because they form a key part of process and the court needs help with working out which version is more plausible on the facts.
  • Avoid complexity for its own sake and resist the temptation to score points. Combine criticism with an explanation, so the court knows 'why'.
  • Make good on your duty to assist the court. This is not just a mantra, but it is a real thing, and the courts are always going to be looking for experts to truly deliver on this.

Requirement for a blueprint

A panel session on collective actions considered the requirement for a blueprint and its impact on certification. Under the "blueprint to trial" test the court should be satisfied that it is clear how the case will proceed to trial from the outset. The CAT does not have to be satisfied that the proposed class representative (PCR) will be able to prove their claim (so this is not a 'merits' test), but it does have to be satisfied that the PCR can take the case to trial and that it will not break down over fundamental flaws in the methodology or approach.

The discussion centred around the point as to whether this is a separate, additional test. Kim Dietzel, partner and co-head of HSF's competition litigation practice, clarified that the Court of Appeal said that the blueprint test is part of the Microsoft test, which indicates it is not a separate test. The CAT wants to ensure that cases can make it to trial, and while the PCR can make changes to the methodology post-certification, the purpose of the blueprint and certification is so the CAT understands the direction of travel and the PCR does not have unfettered discretion to change things going forward.

Anthony Maton, Global Co-Chair of Hausfeld, described it as an unfortunate and surprising development from the CAT, in light of Merricks. It has led to the last three collective actions being sent back for their homework to be marked, which is clearly not what was envisaged by the Supreme Court in Merricks. Maton argued that a blueprint should not be about a gateway to certification, but about how one gets from certification to trial, and accepting that the blueprint is going to change over time.

Carriage disputes

The panel on collective actions also considered competing claims and carriage disputes and the learnings from the FX and Trucks Court of Appeal decisions. The CAT dealt with carriage at the same time as certification, which led to a very long and involved process. The Court of Appeal in FX made it clear that a more rough and ready approach should be adopted and that it will not interfere in these decisions. The FX litigation has also made it clear that carriage will not go to the first to file, and that it is not an arms race under which those with the most funding/insurance will win. It comes back to the relative merits of the case, with the CAT making a relatively quick assessment of which case looks better, and that decision will not be appealable.

Post-Brexit developments

The next panel took stock of post-Brexit developments and what change we are seeing in practice.

Sumal (a preliminary reference case in which the CJEU held that a victim of anti-competitive conduct is entitled to seek damages from the subsidiary of an infringing parent company) was considered in ValueLicensing v Microsoft, with the High Court stating that it would be 'somewhat unrealistic' to think that the Court would diverge from Sumal on a summary judgment basis.

On the other hand there is some divergence occurring, with the CAT in Umbrella Interchange refusing to follow the application of the CJEU's preliminary reference decision in Volvo/DAF on limitation and the cessation requirement.

The view of the panel was that any divergence may ultimately produce advantages or disadvantages for the UK as a jurisdiction.

Economic expert evidence

The final panel session on expert evidence brought the conference discussions full circle, confirming some of the key points raised by Derek Ridyard with a practical illustration.

Expert evidence came in for scrutiny in the CAT's judgment in the first trucks infringement trial in the BT & Royal Mail claims, as it found flaws in both claimant and defendant methodology. On overcharge the CAT looked at the different approaches of the experts but ultimately reached a 5% overcharge, which has also been found in German and Spanish cases, without economic evidence being considered in detail in those cases. The panel compared the relative approaches of the English and German courts (which often involve the appointment of a Court Appointed Expert), and it was noted that the approach in the CAT could be seen as "the best of both worlds" as it involves both party appointed experts, and an economist on the panel, who can act as a quasi-court appointed expert. As regards the judgment in Royal Mail & BT, it was commented on that the judgment demonstrates the importance of economics in competition litigation cases, as the economic evidence was central to the debate at trial and the ultimate finding. The volume of expert evidence filed in that case has been criticised, but it is clear that the CAT sees value in good quality economic evidence – it is about quality, not quantity.