Consumers' Association v Qualcomm Incorporated: preparing to fight on Anti-Avoidance Endorsements

Published date20 June 2022
Subject Matternti-trust/Competition Law, Antitrust, EU Competition
Law FirmErso Capital Advisors LLC
AuthorMs Sarah Breckenridge

In the Competition Appeal Tribunal, claimant and defendant arguments around the grant, nature and scope of a Collective Proceedings Order ("CPO") are developing quickly. The issues around opt-in and opt-out seen in Le Patourel v BT for example, and on carriage of disputes (FX), have been commented on extensively. Two factors which underpin all issues around certification are the requirements to demonstrate adequate funding and adverse costs cover for the claim. These are elements that can make or break a certification.

The recent judgment in Consumers' Association v Qualcomm Incorporated (17 May 2022) develops points on adverse costs insurance, primarily the assertion by defendants that they need assurance, beyond the existence of an After-the-Event policy, that in the event they obtain a costs award, the claimant's policy will pay out for their ultimate benefit.

It's become market practice - in competition claims but more widely in litigation - for defendants seeking that comfort to require that claimants obtain (at further cost) an Anti-Avoidance Endorsement ("AAE") or deed of indemnity in favour of the defendant, both mechanisms which are designed to augment an ATE policy taken out by the Claimant. An AAE amends the policy to remove or reduce the risk that conditions or exclusions operate to deny indemnity. A deed of indemnity is a guarantee to pay the defendants issued by the ATE insurer. Both are designed to ensure pay-outs reach the defendant as the "wronged" but uninsured party.

TheJudge has frequently arranged these products and has been involved in most of the seminal cases that have led to the evolution of both deeds of indemnity and more latterly, AAEs. The need for such instruments increased following the COA decision in Premier Motorauctions [2017] (see High Court provides useful guidance on ATE | TheJudge (thejudgeglobal.com)) and subsequent judgment in Lewis Thermal [2018]. Both cases highlighted that whilst an ATE policy can offer sufficient protection, the threshold for accepting a bare ATE policy is high.

Significantly, though, in Qualcomm the CAT has refused to order that the Consumers' Association, the claimant representing the class of end consumers, must purchase an AAE to protect Qualcomm's interest in the underlying ATE policies. It seems that while it has become customary practice to ask for extra comfort, it will not always be a...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT