UK Court Of Appeal Rejects Private Plaintiff Claim For Restitutionary Award For Cartel Offence

In a setback for private antitrust plaintiffs in the UK, today

the Court of Appeal in London rejected a claim for restitutionary

damages, limiting the Claimant to compensatory damages.

Last October, the High Court in London held that compensatory

damages were the only damages available to cartel victims who, in

reliance upon a European Commission decision, brought private

claims for losses caused by cartel agreements. The Claimants had

sought exemplary damages and restitutionary awards, which could

have increased the amounts they would have won in the actions.

These damage claims failed.

The Claimants had purchased vitamins directly or indirectly from

companies found by the European Commission to have cartelised the

vitamins market in the 1990s. One Claimant, who had purchased

directly from the cartel members, appealed the Court's decision

that it was not entitled to a restitutionary award. A

restitutionary award is measured by reference to the

Defendant's unlawful gains, rather than by reference to the

Claimant's loss, and requires disgorgement of those gains to

the Claimant.

The Claimant had passed on to its own customers most if not all

of the overcharge it had paid to the Defendants. Consequently, it

had suffered little if any loss under a compensatory measure of

damages. In an attempt to sidestep this issue, the Claimant sought

a restitutionary award, to recover payment measured by the

Defendants' gains.

Today, the Court of Appeal decided unanimously that compensatory

damages were an adequate remedy on the facts of the case. A

restitutionary remedy would give the Claimant a windfall, as it had

passed on the overcharge. The appeal was dismissed.

The case has wider implications for remedies law. In the leading

judgment of Lady Justice Arden, she stated that recent case law

indicated that there should be coherence in the law of remedies. As

the House of Lords' decision in Attorney General v.

Blake had held that in exceptional circumstances a

restitutionary award should be available for breach of contract, so

it should be available in tort. The cartel offence is a tort. In

the vitamins case, the Court of Appeal was prevented by its own

previous decision in Stoke-on-Trent Council v. Wass from

making a restitutionary award, as Wass held that...