Skip links

Court Guidance on Price-Fixing Cartels

In a decision which gives important guidance on the scope of remedies available for losses suffered due to breaches of competition law, the Court of Appeal has ruled out a conspiracy claim by one of the corporate victims of a sophisticated price-fixing cartel involving suppliers of copper plumbing tubes.

Company A and other members of its group had been fined almost 45 million Euros by the European Commission for their participation in the cartel. Company B had been a customer of company A and argued that it had suffered loss in that it had paid substantially inflated prices due to the cartel’s distortion of competition.

Company B launched proceedings against company A under Section 47A of the Competition Act 1998, in which it pleaded that it had been the victim of a conspiracy. The case for the first time raised the issue of whether conspiracy was a cause of action that could be pursued under the Act. The High Court ruled that it was, and allowed one of Company B’s conspiracy claims to proceed to trial.

Ruling on company A’s challenge to that decision, the Court of Appeal found that, on a true interpretation of Section 47A, a claimant was entitled to bring a conspiracy claim provided that all the ingredients of the cause of action could be established by the infringement findings made in the Commission’s decision.

However, in allowing company A’s appeal, the Court found that ‘intent to injure’ was an essential ingredient of conspiracy as a cause of action. Although company A had participated in the cartel for its own benefit, the Commission had not found that it had any intent to injure company B.

Company A might well have expected company B to pass on the artificially inflated prices to its own customers and the Court acknowledged that, in the circumstances, it would be rare for a conspiracy claim to succeed in such a case.