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Backhouse Jones, in conjunction with Addleshaw Goddard, have lodged a ground-breaking legal action with the Competition Appeal Tribunal (CAT) on behalf of the Road Haulage Association (RHA). The application, lodged on 17 July 2018, signals the start of a claim against European truck manufacturers found to be colluding in a 14-year price fixing cartel (the “Trucks Cartel”) between 1997 and 2011. The application seeks compensation in excess of £1 billion for thousands of road haulage operators who have suffered loss as a result of the illegal cartel activities.
The legal action, which is open to RHA members and non-members alike, currently has over 3,650 road haulage operators signed up with a further 650 who have registered an interest. It is anticipated that the number of claimants signing up will increase significantly over the coming months and this can be done by visiting www.truckcartellegalaction.com
Early indications suggest that UK transport operators which opt into the claim could be entitled to damages of £6,000 for every 6-tonne and above vehicle they bought or leased between 1997 and 2011. The claim is fully funded by Therium Capital Management Limited and has the benefit of After the Event Insurance, allowing claimants to participate in the collective proceedings without contributing to their own funds.
Commenting on the case, Steven Meyerhoff, Director at Backhouse Jones (legal representatives for the RHA) added: “The submission of the application is the first formal step in the RHA seeking to be appointed class representative on behalf of road haulage operators who suffered loss because of the Trucks Cartel. The RHA will be asking the Tribunal for what’s called a “collective proceedings order” which will authorise the RHA as class representative and define the class of businesses that can opt in to the claim. As the claim is being brought on an opt-in basis, businesses wanting to be part of the claim will need to opt in once the Tribunal has authorised the RHA to be class representative.”
Mark Molyneux, partner at Addleshaw Goddard said: “This is a significant claim and we expect the overall value is likely to exceed £1 billion. This was a lengthy infringement of competition law that we know has affected around 600,000 purchasers of trucks in the UK between 1997 and 2011. We know cartel activity is extremely damaging to customers and truck purchasers should be entitled to be compensated for the loss that they have a suffered as a result of this activity. We hope that the CAT will agree that this is exactly the right type of claim that should be permitted under the new regime and allow the RHA to bring a collective claim on behalf of truck purchasers.”
David Went, barrister at Exchange Chambers comments: “This is the first case in which anyone has tried to use the new regime that allows a representative to bring a collective claim on behalf of businesses impacted by a competition law infringement. The claim being brought by the RHA on behalf of the haulage sector is precisely the type of claim envisaged under the new rules. There have been two previous attempts to use the new regime but they were both opt-out collective actions on behalf of consumers. We don’t think that the RHA’s claim will face the same difficulties that beset those claims not least because it is possible to link the overall claim value back to the amount of loss actually suffered at the level of each individual claimant.”
Background to the “Trucks Cartel”
The RHA’s claim for compensation is based on the European Commission’s decision in July 2016 to fine European truck manufacturers MAN, Daimler/Mercedes, Iveco, Volvo/Renault and DAF, €2.93 billion after they admitted operating the Trucks Cartel. The Commission found that the Trucks Cartel operated between 17 January 1997 and 18 January 2011 (the “Cartel Period”) and related to trucks of six tonnes and over.The illegal activities included:
- fixing gross list prices;
- agreeing the costs that truck purchasers would be charged for emissions technologies (Euro III, IV, V and VI); and
- delaying the introduction of those emissions technologies.
While Scania was not party to the original decision, having denied its involvement in the Trucks Cartel, the Commission subsequently found it guilty and imposed a fine of €880 million. Scania has appealed this decision, which will be heard by the European Courts in due course.