It’s not EU, it’s me: CAT rules that a post-Brexit CJEU judgment is not authority for extending English limitation period for ongoing competition infringements

The CJEU’s Volvo Decision

The CAT’s judgment concerns the implications of the Volvo Decision, which arose out of a request for a preliminary ruling by a Spanish court regarding limitation. In short, the CJEU had to determine on what date the limitation period began to run in order to assess whether the relevant claim was time-barred. The basis on which the CJEU determined the start of the limitation period was the question before the CAT in these proceedings.

The Claimants submitted that the CJEU ruled that limitation periods applicable to actions for damages for infringements of competition law of EU Member States cannot begin to run until (i) the infringement has ceased (the Cessation Requirement); and (ii) the injured party knows, or can reasonably be expected to know, the fact it has suffered harm as a result of the infringement and the identity of the perpetrator (the “Knowledge Requirement”). Consequently, to the extent that English limitation rules are inconsistent with the Cessation Requirement articulated by the CJEU, they must give way to the law of the EU, despite the Volvo Decision post-dating the UK’s exit from the EU. If this interpretation were correct, the limitation periods applicable to the Claimants’ claims would not have begun to run and no part of their claims would be time-barred.

The legal issues before the CAT

The Volvo Decision is not authority for the proposition that, as a matter of EU law, the limitation period in pre-Damages Directive competition claims can only begin to run from the time when the alleged infringement of competition law has ceased

Following Brexit, it fell to the CAT (rather than the CJEU) to interpret the Volvo Decision as a matter of EU law. The CAT held that the “operative” part of a CJEU judgment is distinct from its reasoning. The “operative” part, i.e. the CJEU’s ruling, is the final part of the judgment set out in bold type and prefaced with “On those grounds, the Court hereby rules”. This “operative” part is binding and is to be interpreted in light of the preceding sections of the judgment.

On this basis, the CAT determined that, while the Cessation Requirement was articulated briefly in the body of the Volvo Decision, it did not form part of the operative part of the judgment, nor the necessary foundation for the operative part. The CJEU’s binding ruling instead rested entirely on the Knowledge Requirement. The CAT concluded, “It follows that the CJEU’s expression of the Cessation Requirement, which is not reflected at all in the [operative part], is not binding. Therefore, even if the United Kingdom were still part of the EU, [the CAT] would not be required to follow it” (§28).

The question of whether, as a matter of EU law, the limitation period in pre-Damages Directive competition claims can only begin to run from the time the claimant knows, or can reasonably be expected to know, the information necessary to bring the claim, “is a question for another day”

The CAT intentionally did not address whether, following the Volvo Decision, EU law requires national limitation rules to include a Knowledge Requirement. The CAT explained that submissions on the point were limited and were understood as being for the assistance of the Tribunal in understanding the Volvo Decision rather than any party contending that the Volvo Decision had expanded the EU law of limitation as regards the Knowledge Requirement. If the Merricks Claimants did wish to address this point, the CAT explained that it would be preferable to do so in the separate Merricks Proceedings, where it could be addressed in the relevant factual context (§31).

In any event, the CAT would not be bound to follow the Volvo Decision given Brexit

Given its conclusion in relation to the interpretation of the Volvo Decision, the CAT determined that the question of whether it is obliged to follow the Volvo Decision did not have to be answered. It nevertheless gave the point detailed consideration given it had been fulsomely argued by the parties.

The Umbrella Proceedings Claimants had contended that their claims constituted “accrued EU law rights”, i.e. EU law rights which accrued pre-IP completion day^[1] and remained subject to EU law following Brexit, including CJEU decisions. The majority of the Tribunal^[2] found that there was “no such thing” as accrued EU law rights (§69). On IP completion day, the “gateway” by which EU law applied in the UK (i.e. the European Communities Act 1972) was repealed and EU law at the time was translated into English law (as “retained EU law”), including existing EU rights. The CAT held that, even if the Volvo Decision did impose a pre-Damages Directive Cessation Requirement, it would not be bound by the Volvo Decision following IP completion day as it does not form part of retained EU law (§§71-72).

The majority noted that pursuant to s.6(2) of the European Union (Withdrawal) Act 2018 (the “2018 Act”), it may “have regard” to the Volvo Decision’s obiter observation that the principle of effectiveness encompassed a Cessation Requirement, however, it chose not to follow that observation. Its reasons for doing so included the fact that it was bound by the Court of Appeal’s Arcadia decision^[3] which found that English limitation rules, which do not include a Cessation Requirement, complied with the EU’s principle of effectiveness (§§28(4), 73).

The end of the Volvo limitation issue?

Following the CAT’s decision, subject to any appeal, claimants to UK proceedings seeking damages for infringements of competition law provisions that began before 9 March 2017 will remain bound by the six-year limitation period under the Limitation Act 1980 (subject to any arguments under s32 Limitation Act 1980). It remains to be seen whether the Claimants will seek to appeal the judgment.