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...
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