Introduction

The case of DSG Retail Ltd v. Mastercard Incorporated & Ors ([2020] EWCA Civ 671) addresses critical questions surrounding the limitation periods applicable to follow-on claims in competition law proceedings. The claimants, DSG Retail Ltd and Dixons Retail Group Ltd (collectively referred to as "Dixons"), initiated claims against Mastercard and its affiliates based on alleged infringements of Article 101 of the Treaty on the Functioning of the European Union (TFEU). These claims were brought before the Competition Appeal Tribunal (the "Tribunal") under Section 47A of the Competition Act 1998, which had been amended by the Consumer Rights Act 2015. The primary issues revolved around the proper construction of Tribunal Rules, specifically Rule 31(4) of the Competition Appeal Tribunal Rules 2003, and the application of Section 32(1)(b) of the Limitation Act 1980 regarding "reasonable diligence" in discovering concealed facts relevant to the claimants' right of action.

Summary of the Judgment

The England and Wales Court of Appeal (Civil Division) reviewed the Tribunal's decisions concerning the limitation periods of the claims brought by Dixons against Mastercard. The Tribunal had previously determined that Dixons' claims related to infringements of Article 101 that occurred between 22 May 1992 and 20 June 1997 were not time-barred. However, Mastercard contested this, arguing that these claims should indeed be considered time-barred under Rule 31(4) of the Competition Appeal Tribunal Rules 2003, as they would have been outside the limitation period when Section 47A came into force.

The Court of Appeal concluded that the Tribunal erred in its interpretation and application of Rule 31(4) and Section 32(1)(b) of the Limitation Act 1980. Specifically, the Court held that pre-20 June 1997 claims were prima facie time-barred and that the Tribunal incorrectly assumed that claimants were on notice to investigate the need for their claims, thereby improperly applying the concept of "reasonable diligence."

Consequently, the Court of Appeal allowed Mastercard's appeal, finding that the Tribunal should have dismissed its application for summary judgment entirely, rather than accepting it on different legal grounds.

Analysis

Precedents Cited

The judgment extensively referenced several key precedents that shaped the Court's analysis:

• Yew Bon Tew v. Kenderaan Bas Mara [1983] AC 553: Established that statutes should not be interpreted retroactively to impair existing rights unless unavoidable.
• Paragon Finance v. Thakerar [1998] EWCA Civ 1249: Defined the "reasonable diligence" standard for discovering concealed facts.
• Gresport Finance Ltd v Battaglia [2018] EWCA Civ 540: Clarified that "reasonable diligence" assumes the claimant is on notice to investigate.
• Arcadia Group Brands Ltd v. Visa Inc [2014] EWHC 3561 (Comm) and [2015] EWCA Civ 883: Discussed the "statement of claim" test and its application in determining if all essential factual elements have been discovered with reasonable diligence.
• Cooke v. Gill (1873) LR 8 CP 107: Provided a foundational definition of "cause of action."
• Aldi Stores Ltd v. Holmes Buildings PLC [2003] EWCA Civ 1882: Addressed that additional heads of loss do not constitute new causes of action.

Legal Reasoning

The Court's reasoning focused on the correct interpretation of Fleet Rules and the application of the Limitation Act. The key points include:

• Interpretation of Rule 31(4): The Tribunal incorrectly interpreted "proceedings" to encompass all claims within a single action, allowing time-barred claims to proceed if any part was within the limitation period. The Court clarified that "proceedings" refer to individual claims, not the entire set, thereby affirming that pre-20 June 1997 claims were time-barred.
• Application of Section 32(1)(b): The Tribunal assumed claimants were on notice to investigate potential claims, simplifying the "reasonable diligence" requirement. The Court emphasized that determining whether claimants were indeed on notice requires a factual inquiry, which should not be decided summarily.
• Statement of Claim Test: The Tribunal applied the test to whether all essential factual elements were discoverable with reasonable diligence, but did so without adequately considering if there was an actual trigger for investigation, leading to a flawed conclusion.

Impact

This judgment has significant implications for future competition law cases, particularly regarding the timing and discovery of claims:

• Clarification of Limitation Periods: Solidifies the understanding that follow-on claims must adhere strictly to the limitation periods set forth by Tribunal Rules and cannot be extended through assumptions of diligence.
• Burden of Proof: Emphasizes that claimants must demonstrate not only the existence of relevant facts but also that they were on notice to investigate those facts with reasonable diligence.
• Procedural Integrity: Ensures that time-barred claims are appropriately dismissed, preventing the revival of stale claims irrespective of the introduction of new statutory regimes.
• Guidance for Claimants and Defendants: Provides clearer guidelines on how "reasonable diligence" is assessed, influencing how parties prepare and argue their cases in competition law proceedings.

Complex Concepts Simplified

Rule 31(4) of the Competition Appeal Tribunal Rules 2003

This rule serves as a safeguard to prevent claims from proceeding if they would have been time-barred under previous limitation rules before the enactment of Section 47A. The Tribunal had misinterpreted this rule by treating it as applying to all claims within a single proceeding, whereas it should apply to individual claims based on their respective dates.

Section 32(1)(b) of the Limitation Act 1980

This section allows the limitation period for a claim to be extended if the claimant can prove that the defendant deliberately concealed relevant facts. The key requirement is "reasonable diligence" in discovering these concealed facts, which the Court emphasized must be assessed objectively and based on whether the claimant was on notice to investigate.

Reasonable Diligence

"Reasonable diligence" refers to the efforts a claimant must undertake to uncover facts that are essential to their claim. It involves an objective standard, considering what a person in the claimant's position would have done with adequate resources and motivation to investigate the claim.

Statement of Claim Test

This test examines whether a claimant has identified and pleaded all the essential factual elements necessary to establish their cause of action. It ensures that claims are fully founded and that defendants have clear grounds for defense.

Conclusion

The Court of Appeal's decision in DSG Retail Ltd v. Mastercard Incorporated & Ors serves as a pivotal clarification in the realm of competition law, particularly concerning the application of limitation periods in follow-on claims. By rectifying the Tribunal's misinterpretation of Rule 31(4) and the improper assumption regarding "reasonable diligence," the judgment reinforces the importance of adhering to established procedural rules and objective standards in legal proceedings.

This ruling not only upholds the integrity of the limitation period framework but also provides essential guidance for both claimants and defendants in future competition law cases. It underscores the necessity for precise legal interpretation and the careful application of statutory provisions to prevent unjust outcomes where time-barred claims might otherwise receive unwarranted consideration.