Anti-Competitive Cartels, Mistakes Of Law, And Unfair Credit Relationships: Deliberate Concealment And Mistakes Under The Limitation Act 1980

• Published date: 18 August 2022
• Subject Matter: Anti-trust/Competition Law, Consumer Protection, Antitrust, EU Competition , Cartels, Monopolies, Consumer Credit
• Law Firm: Gatehouse Chambers
• Author: Miguel Henderson

In the recent case of Gemalto Holding BV & Ors v Infineon Technologies Ag & Ors [2022] EWCA Civ 782, the Court of Appeal held that the correct approach to postponing the start of the limitation period in cases of deliberate concealment is that set out by the UKSC test set out in Test Claimants in the Franked Investment Group Litigation v HMRC [2020] UKSC 47 for cases of mistake, and not the 'statement of claim' test set out in Arcadia Group Brands v. Visa [2015] EWCA Civ 883. In this post, we consider why the Court of Appeal in Gemalto considered it appropriate to apply an analogy between deliberate concealment and mistake, and the more practical questions of how much a prospective claimant needs to have discovered of what has been deliberately concealed from him such that time begins to run. We also consider the wider implications of Gemalto in other areas of law; in particular, PPI claims and postponing the start of the limitation period where an unfair relationship under the Consumer Credit Act 1974 by virtue of undisclosed commissions earned by lenders is alleged.

Background

The Defendants were producers of smart card chips, who had been the suppliers of these chips to the Claimant ('Gemalto').

On 7 January 2009, the EU Commission published press releases stating that a surprise inspection had been conducted at the premises at several unnamed producers of smart card chips in EU Member States. The press releases were qualified with statement that inspections of this sort were a preliminary step in investigating suspected cartels but did not mean there had been a cartel.

Nevertheless, on the same day, Gemalto began internal processes and soon learned that both Defendants had been raided by the Commission. By 16 January 2009, Gemalto had consulted with a law firm with 'heavyweight' experience in competition law.

On 3 July 2012 and 25 September 2012, Gemalto received two Requests for Information (RFIs) from the Commission regarding the suspected cartel. These RFIs identified a time period of between 2003 and 2006 for their inquiries. Gemalto promptly responded to both RFIs within a matter of weeks.

The Commission then published a press release on 22 April 2013, which referred to its having sent a Statement of Objections to the participants in the alleged cartel. This was followed by an infringement decision dated 3 September 2014 finding that between 2003 and 2005 various named suppliers of smart card chips, including the Defendants, had unlawfully coordinated their pricing behaviour and exchanged competitively sensitive information.

Accordingly, Gemalto issued proceedings on 19 July 2019 claiming losses arising from the unlawful cartel in which the Defendants had participated.

The Law and the Issues

The Defendants accepted there had been deliberate concealment such that s 32(1)(b) of the Limitation Act 1980 was in principle engaged. The issue in dispute between the parties was when Gemalto had 'discovered' the concealment such that time started to run under that section.

Section 32 of the Limitation Act 1980 provides as follows:

(1) ... where in the case of any action for which a period of limitation is prescribed by this Act, either -

(a) the action is based upon the fraud of the defendant; or
(b) any fact relevant to the plaintiff's right of action has been deliberately concealed from him by the defendant; or
(c) the action is for relief from the consequences of a mistake;

the period of limitation shall not begin to run until the plaintiff has discovered the fraud, concealment or mistake (as the case may be) or could with reasonable diligence have discovered it.

The Court Below

The Judge (Bacon J) identified two tests for determining when time starts to run in concealment cases for the purpose of s 32(1)(b):

1. The "Statement of Claim" test applied in Arcadia Group Brands v. Visa [2015] EWCA Civ 883 and in other cases: time starts to run when the claimant had...