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DSG Retail Limited and Another v MasterCard Incorporated and Others
Factual and Procedural Background
This judgment concerns three separate follow-on private actions brought before the Competition Appeal Tribunal ("the CAT") against the same Defendants, collectively referred to as "MasterCard". The Claimants are: (i) Company A and Company B (the "Dixons proceedings"); (ii) Company C (the "Dixons Carphone proceedings"); and (iii) Company D and three other companies within the same corporate group (the "Europcar proceedings").
The claims arise from a 19 December 2007 decision ("the Decision") by the EU Commission finding that MasterCard infringed Article 101 of the Treaty on the Functioning of the European Union by setting a minimum interchange fee ("EEA MIF") applied to cross-border and certain domestic payment card transactions within the European Economic Area. The infringement period was from 22 May 1992 until 19 December 2007, after which MasterCard was ordered to cease the infringement within six months.
The Claimants allege they suffered loss due to the Domestic Multilateral Interchange Fee ("Domestic MIF"), which they claim was influenced or set by the EEA MIF, and seek damages for the period from 22 May 1992 to 21 June 2008 and for any continuing effects thereafter ("Run Off Overcharges").
The Defendants applied to set aside service out of jurisdiction on two Defendants and/or for summary judgment on limitation grounds, specifically that claims for damages before 20 June 1997 are time-barred. The application was not pursued in the Dixons Carphone proceedings. The CAT heard these applications alongside a related claim by other parties, which settled subsequently and fell away.
Legal Issues Presented
- Whether the claims for damages in the Dixons and Europcar proceedings for the period 22 May 1992 to 20 June 1997 are time-barred under the limitation provisions of the Competition Appeal Tribunal Rules 2003 and 2015.
- If time-barred, whether the Claimants have an arguable case that the limitation period is postponed under section 32(1)(b) of the Limitation Act 1980 due to deliberate concealment by the Defendants.
Arguments of the Parties
Defendants' Arguments
- The limitation defence under rule 31(4) of the 2003 Rules bars claims for damages before 20 June 1997, as such claims would have been time-barred if brought in court when section 47A of the Competition Act 1998 came into force in 2003.
- For the Europcar proceedings, rule 119(2) of the 2015 Rules should be interpreted to preserve MasterCard’s accrued limitation rights, meaning claims before 20 June 1997 remain time-barred.
- Reliance on the Privy Council decision in Yew Bon Tew v Kenderaan Bas Mara to argue that retrospective removal of limitation defences is impermissible.
- Submission that the Claimants could with reasonable diligence have discovered the relevant facts before 20 June 1997, negating the application of section 32(1)(b) of the Limitation Act 1980.
Claimants' Arguments
- The Defendants’ interpretation of rule 31(4) and rule 119 is incorrect; no part of the claims falls outside the applicable limitation periods.
- Even if the limitation defence applies, the Claimants have a well-arguable case under section 32(1)(b) of the Limitation Act 1980 that relevant facts were deliberately concealed and could not have been discovered with reasonable diligence before 20 June 1997.
- Reasonable diligence requires a "trigger point" to investigate, which was not present before the Decision and its appeal process.
- The claims relating to Domestic MIFs are distinct and could not have been discovered before the Decision, thus postponing limitation.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Yew Bon Tew v Kenderaan Bas Mara [1983] AC 553 | Principle against retrospective removal of accrued limitation defences. | The Court considered the principle but found it did not apply to the Europcar proceedings due to deliberate statutory drafting choices. |
| Arkin v Borchard Lines Ltd [2000] UKCLR 494 | Continuous breach accrues a fresh cause of action each day. | Supported the Court’s interpretation that limitation applies to proceedings, not individual claims, allowing claims for continuing infringement. |
| BCL Old Co Ltd v BASF SE (No 2) [2010] EWCA Civ 1258 | Rule 31(4) excludes claims where limitation expired before section 47A came into force. | Referenced but distinguished as the present case involved different timing and application of limitation rules. |
| Arcadia Group Brands Ltd v Visa Inc [2014] EWHC 3561 (Comm), [2015] EWCA Civ 883 | Interpretation of section 32(1)(b) Limitation Act 1980 and 'statement of claim' test. | Applied extensively to assess whether Claimants could with reasonable diligence have discovered relevant facts before limitation cut-off. |
| Johnson v Chief Constable of Surrey (CA, unreported, 23 November 1992) | Section 32(1)(b) applies narrowly to facts essential to cause of action. | Adopted to define the scope of relevant facts for postponement of limitation. |
| Paragon Finance v DB Thakerar & Co [1991] 1 All ER 400 | Definition of reasonable diligence in discovery context. | Used to guide the Court's assessment of what diligence Claimants could be expected to exercise. |
| Gresport Finance Ltd v Battaglia [2018] EWCA Civ 540 | Further elaboration on reasonable diligence and assumption of desire to investigate. | Supported the Court’s approach to reasonable diligence as including a motivation to investigate. |
| Aldi Stores Ltd v Holmes Buildings PLC [2003] EWCA Civ 1882 | Distinction between new causes of action and new heads of loss. | Applied to determine that claims related to Domestic MIFs constituted distinct causes of action. |
| The "Kriti Palm" [2006] EWCA Civ 1601 | Application of the 'statement of claim' test and identification of distinct causes of action. | Used to conclude that claims relating to Domestic MIFs are separate and distinct from cross-border claims. |
| Racecourse Association v Office of Fair Trading [2005] CAT 29 | Allocation of evidential burden regarding objective necessity in competition law claims. | Adopted to clarify that objective necessity is not essential to complete cause of action. |
Court's Reasoning and Analysis
The Court began by examining the statutory and regulatory framework governing competition damages claims, particularly the Competition Act 1998, the Enterprise Act 2002, the Consumer Rights Act 2015, and the Competition Appeal Tribunal Rules 2003 and 2015. It noted the transitional arrangements governing limitation periods depending on when proceedings were commenced and when claims arose.
The Court accepted that the claims relate to a continuous infringement by MasterCard of Article 101 TFEU via the EEA MIF and its effect on Domestic MIFs.
Regarding limitation, the Court interpreted rule 31(4) of the 2003 Rules as barring claims if proceedings would have been time-barred before the introduction of section 47A, but only in relation to entire proceedings, not individual claims within proceedings. This interpretation avoids the illogical result that claimants who commenced proceedings later would be better protected than earlier claimants.
The Court rejected the Defendants’ reliance on the principle in Yew Bon Tew for the Europcar proceedings, as the relevant rules deliberately did not preserve rule 31(4) for those proceedings.
On the application of section 32(1)(b) of the Limitation Act 1980, the Court applied the 'statement of claim' test from Arcadia and related authorities, holding that only facts essential to the cause of action are relevant for postponement of limitation. Facts that merely strengthen the claim or relate to quantum are insufficient.
The Court found that the Claimants could have discovered with reasonable diligence the essential facts relating to the decision of an association of undertakings to set the EEA MIF and its anti-competitive effect on cross-border transactions before 20 June 1997. This was supported by public documents, Commission notices, and contemporaneous press reports, as well as knowledge of complaints by retailers.
However, the Court held that the claims relating to the Domestic MIF, and the role of the EEA MIF as a fallback or benchmark for Domestic MIFs, constituted a distinct cause of action that could not have been discovered with reasonable diligence before 20 June 1997. This was because the relevant facts were only disclosed in the 2007 Decision and supporting documents.
Consequently, limitation for claims relating to domestic transactions was postponed under section 32(1)(b), while claims relating solely to cross-border transactions were not.
The Court also addressed the Defendants’ argument that objective necessity was an essential element of the cause of action, rejecting it based on established jurisprudence and the burden of proof resting with defendants on such matters.
Applying the above reasoning, the Court concluded that none of the claims in the Dixons or Europcar proceedings are time-barred, and that the limitation defence raised by MasterCard fails.
Holding and Implications
The Court DISMISSED MasterCard's applications to set aside service out of jurisdiction and/or for summary judgment on limitation grounds.
The direct effect is that all claims in the Dixons and Europcar proceedings, including those covering the period before 20 June 1997, are permitted to proceed. The Court did not find it necessary to set any new precedent beyond applying established principles to the complex interplay of limitation rules and the facts of this case. The judgment clarifies the application of limitation rules and the section 32(1)(b) test in the context of follow-on competition damages claims involving continuous infringements and distinct causes of action.
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