The Competition Appeal Tribunal (CAT) has given the nod to a unique litigation funding structure within the same funder.
- The approval was for an opt-in collective proceedings order (CPO) by the Road Haulage Association (RHA).
- This decision arises after a €3bn fine by the European Commission on major truck manufacturers for price fixing.
- A division was necessary to address conflicts between new and used truck claims within the same funding framework.
- The CAT ensured adequate measures were in place to prevent conflicts of interest within the litigation process.
The Competition Appeal Tribunal (CAT) has approved a novel litigation funding approach that involves the establishment of a ‘separate funding vehicle’ within the same litigation funder. This approval is part of an opt-in collective proceedings order (CPO) initiated by the Road Haulage Association (RHA).
In 2022, the CAT favoured the RHA’s action, backed by litigation funder Therium, to pursue a claims process following the European Commission’s decision to fine multiple truck manufacturers for engaging in cartel activities over several years. The fine amounted to nearly €3bn, highlighting the seriousness of the price-fixing allegations.
Initially, the CAT withheld the CPO pending an appeal from another potential class representative. This appeal was ultimately rejected by the Court of Appeal, except in aspects concerning potential conflicts of interest between new and used truck purchasers.
The core issue arose from the varied interests of new versus used truck purchasers. New truck buyers aim to demonstrate that no overcharge was transferred when trucks were resold, while used truck purchasers aim to show the overcharges were passed on. This conflict required RHA to establish safeguards to protect the interests of each sub-class.
To address these conflicts, RHA formed RHA Used Trucks Ltd (RUTL), establishing a separate company with distinct legal representation. They faced the challenging task of finding a funder willing to support only part of the claimant class, while the original funder, Therium, maintained financial interest in common issues.
Despite the complexity and potential conflicts, Therium agreed to provide a separate funding stream via Therium Litigation Atlas, distinct from its other operations. This arrangement included strict information barriers, supported by undertakings to prevent information disclosure.
The CAT concluded that these arrangements sufficiently addressed any existing and potential conflicts, ensuring fair representation and decision-making. It rejected claims of potential conflicts related to the allocation of funds and the role of key personnel within Therium.
In conclusion, the CAT authorised RUTL as a sub-class representative and granted the CPO to RHA, marking a significant milestone as the first opt-in CPO approved by the tribunal.
The CAT’s decision underscores the importance of robust conflict management in complex litigation funding schemes.
