AB Volvo (Publ) & Ors v Ryder Ltd & Ors

Factual and Procedural Background

Five appeals have been brought against a judgment of the Competition Appeal Tribunal (the CAT) on a preliminary issue arising in seven follow-on damages claims brought by the Respondents. The damages claims follow on from an infringement decision adopted by the European Commission on 19 July 2016 ("the Decision") concerning truck manufacturers (the Appellants), some of whom were addressees of the Decision. The Decision found that those addressees infringed competition rules by participating in a long-running cartel involving pricing and emission technology costs for medium and heavy trucks across the EEA from 1997 to 2011.

The infringement decision was adopted under the Commission’s settlement procedure, whereby parties admitting the infringement may receive a 10% reduction in fines. The addressees admitted their involvement and obtained the reduction. The Respondents, purchasers or lessees of trucks during the infringement period, claim compensation alleging prices were artificially inflated due to the unlawful conduct.

The preliminary issue concerns whether it is an abuse of process for the Appellants to contest facts set out in the Decision which they admitted during the settlement procedure, in defending the follow-on damages claims. The CAT held that in certain circumstances it would be an abuse of process for the Appellants to contest such facts. Permission to appeal was granted.

The Appellants contend that EU law, particularly Article 16 of Regulation 1/2003, precludes the English common law doctrine of abuse of process in this context, arguing that national courts cannot take decisions contrary to Commission decisions. They also argue that preventing contestation of certain facts breaches their fundamental rights of defence under EU law and undermines the settlement procedure, breaching the duty of sincere cooperation under Article 4(3) TEU.

The CAT’s judgment on 4 March 2020 analyzed the settlement procedure, the content of the Decision, and the application of abuse of process. The appeals were heard and dismissed, with detailed reasons provided for the decision.

Legal Issues Presented

1. Whether the application of the abuse of process doctrine is precluded by EU law, including Article 16 of Regulation 1/2003, Articles 47 and 48 of the European Charter of Fundamental Rights, and/or the duty of sincere cooperation under Article 4(3) TEU.
2. If the above is unclear, whether the court should refer questions to the Court of Justice of the European Union (CJEU) for a preliminary ruling under Article 267 TFEU.
3. If EU law does not preclude it, whether the CAT was correct to hold that the abuse of process doctrine was engaged when the Appellants sought to contest facts they had admitted in the Decision.
4. Whether the CAT erred in the threshold applied for the abuse of process doctrine and in concluding that the threshold was met in this case.

Arguments of the Parties

Appellants' Arguments

• Article 16 of Regulation 1/2003 prohibits national courts from taking decisions contrary to Commission decisions, which should prevent the application of abuse of process to contest facts admitted in settlement decisions.
• Preventing contestation of admitted facts breaches fundamental rights of defence and the presumption of innocence under Articles 47 and 48 of the Charter of Fundamental Rights.
• The CAT’s ruling discourages parties from using the settlement procedure, breaching the duty of sincere cooperation under Article 4(3) TEU.
• If EU law does not preclude application of abuse of process, the CAT erred in the test applied and in concluding the test was met.
• If necessary, a reference to the CJEU should be made before the deadline imposed by the Withdrawal Agreement.
• The non-essential facts in the Decision are not binding as a matter of EU law and are incapable of appeal, so they cannot constitute a ‘final decision’ for abuse of process purposes.
• The Appellants contend the admissions made in settlement proceedings are for the settlement process only and not binding in subsequent litigation.

Respondents' Arguments

• The dispute concerns only the binding nature of facts accepted by the parties in the settlement decision; contesting non-essential findings outside that context is not at issue.
• The CAT was correct to hold that both essential and non-essential facts admitted in the settlement decision are binding in follow-on damages claims, except where the Appellants can rely on specific exceptions.
• The application of abuse of process is appropriate to prevent unfairness and protect claimants from having to prove facts already admitted by defendants.
• There is no breach of EU law in applying the abuse of process doctrine in this context.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began by outlining the settlement procedure under EU law, emphasizing that parties admitted to the infringement and accepted liability, receiving a reduced fine and a shorter decision. The Decision recorded both essential and non-essential facts admitted by the Appellants.

The CAT distinguished between essential facts, which are necessary for interpreting or supporting the operative part of the Decision and are binding under Article 16 of Regulation 1/2003, and non-essential facts, which are not binding under EU law and may be contested unless prevented by domestic law.

The court rejected the Appellants' argument that Article 16 precluded the application of the English abuse of process doctrine. Article 16 only prohibits national courts from taking decisions contrary to the Commission’s decision but does not govern pleading and evidential rules in follow-on damages claims. The abuse of process doctrine, a domestic procedural principle, may bind parties to their prior admissions even if EU law does not require it.

Regarding fundamental rights under Articles 47 and 48 of the Charter, the court found no breach of the right to a fair trial or presumption of innocence. The settlement procedure provides procedural safeguards, including rights of defence and opportunities to withdraw admissions if the Commission’s statement of objections or decision deviates from the settlement submissions. The admitted facts in the published Decision do not engage Pergan protection as they are not confidential or excluded from publication.

The duty of sincere cooperation under Article 4(3) TEU was considered but rejected as a basis to disapply the abuse of process doctrine. The EU legislature balanced leniency and settlement incentives with the facilitation of damages claims. The settlement procedure’s protections, including confidentiality of settlement submissions, are preserved, and the admissions recorded in the Decision are appropriately binding in follow-on proceedings.

The court declined to refer questions to the CJEU, finding the issues sufficiently clear and grounded primarily in domestic procedural law.

On domestic law grounds, the court held that the entire Commission Decision, including non-essential facts, constitutes a ‘final decision’ for abuse of process purposes, contrary to the Appellants’ submission that only appealable facts are final. The Decision is binding on the addressees, who had full opportunity to contest it in the settlement process.

The CAT applied the Bairstow test, requiring manifest unfairness or disrepute to the administration of justice for abuse of process to be found. The court found no error in the CAT’s approach or conclusion that it would be unfair and disreputable to allow the Appellants to resile from their admitted facts, thereby forcing claimants to prove facts already admitted.

The court noted that the CAT allowed certain exceptions ("the [141] gateways") where contesting facts would not be abusive, such as where claimants do not object, where new evidence emerges, or where inconsistencies with underlying documents exist.

In sum, the court upheld the CAT’s reasoning that the abuse of process doctrine properly applies to bind the Appellants to their admissions in the settlement decision, including non-essential facts, and that this application is consistent with EU law and domestic procedural principles.

Holding and Implications

DISMISSED

The court dismissed the appeals, affirming the CAT’s judgment that the Appellants are bound by their admissions of facts set out in the settlement Decision, including non-essential facts, under the English law doctrine of abuse of process. The court held that EU law does not preclude this application, that fundamental rights are not infringed, and that the Decision as a whole constitutes a final decision for abuse of process purposes.

The direct consequence is that the Appellants cannot contest the admitted facts in follow-on damages claims except under limited exceptions recognized by the CAT. No broader new precedent altering the balance between EU law and domestic procedural law was established; rather, the judgment clarifies the interplay between Commission settlement decisions and follow-on litigation in national courts.