Appeal Nos: CA-2023-002572 / CA-2023-002574 Umbrella Interchange Fee Claimants v Umbrella Interchange Fee Defendants
The UK Court of Appeal has dismissed the appeal of various merchants in the ongoing Merchant Interchange Fee Umbrella Proceedings which sought to argue that English courts were bound by two post-Brexit decisions of the Court of Justice of the European Union (“CJEU”) to extend the merchants’ limitation periods back to the start of the alleged infringements (permitting claims back to 1992, or potentially earlier).
The appeal concerned a decision of the UK Competition Appeal Tribunal (“CAT”) (see our previous blog post here) which unanimously concluded that the CJEU’s decision in AB Volvo and DAF Trucks NV v RM (“Volvo”) is not authority for the proposition that EU law requires national limitation rules to include a requirement that the period will only begin to run once a competition infringement has ceased (a “Cessation Requirement”) in pre-Damages Directive1 cases. In any event, the CAT observed that, even if Volvo did impose a Cessation Requirement, the CAT would not be obliged to follow a post-Brexit CJEU decision, and it would not have opted to follow Volvo in any event because of existing Court of Appeal precedent.
On 19 December 2024, the Court of Appeal dismissed the merchants’ appeal of the CAT’s judgment. In particular, the Court held that it was bound by the recent Supreme Court decision of Lipton v BA Cityflyer Ltd [2024] UKSC 24 (10 July 2024) (“Lipton”) which held that English courts are not bound by post-Brexit CJEU decisions, including in respect of claims that concern EU law causes of action that arose pre-Brexit. The Court was not bound by Volvo, nor the more recent CJEU decision in Heureka Group a.s. v Google LLC (“Heureka”), which also addressed national law limitation periods for pre-Damages Directive claims. The merchants were not, therefore, permitted to rely upon Volvo or Heureka to extend the applicable limitation period beyond the statutory six years from accrual of the cause of action.
We note that Linklaters acts for Visa in this case.
The Supreme Court’s Lipton decision is binding
Although the CAT decision under appeal had considered the issue of whether English courts are bound by post-Brexit CJEU decisions, the subsequent Supreme Court judgment in Lipton on the same points of principle meant that it was Lipton that was the focus of this appeal. The majority in Lipton favoured what the Supreme Court called the “Complete Code analysis” of the European Union (Withdrawal) Act 2018 (“EUWA 2018”). Under this analysis, an EU law cause of action arising pre-Brexit is “retained EU law”. Consequently, under s.6(1) of the EUWA 2018, English courts are not bound by post-Brexit CJEU decisions when considering a pre-Brexit cause of action.
The Court of Appeal held that it was bound to follow the analysis in Lipton and decide that neither Volvo nor Heureka are binding on English courts. The Court noted that it is for the merchants to seek to persuade the Supreme Court to hear further debate about the appropriate analysis for pre-Brexit EU law causes of action so soon after its decision in Lipton.
Should Volvo and Heureka nevertheless be followed?
Under s.6(2) EUWA 2018, the English courts may “have regard to” a post-Brexit CJEU decision so far as the decision is relevant to any matter before the court.
The Court of Appeal first considered whether Heureka established a Cessation Requirement under EU law. Although there is not a detailed assessment of Heureka in the judgment (only two paragraphs), the Court of Appeal determined that Heureka is authority that the EU law principle of effectiveness requires a Cessation Requirement to be read into national limitation laws (where the Damages Directive is inapplicable). The Appellants argued that Heureka represented EU law before Brexit and so the Court would need to follow Heureka despite it not being binding under s.6(1) EUWA. However, the Court found that Heureka is a new development of EU law and it is not the case that the Cessation Requirement was an established principle of EU law prior to Volvo or Heureka (and pre-Brexit). Prior to these cases, there was no universal Cessation Requirement; instead, national limitation rules were considered as a whole when assessing whether they complied with the EU principle of effectiveness.
Having considered that there was no pre-Brexit EU precedent for the Cessation Requirement, the Court found that it was bound by the Court of Appeal’s previous judgment in Arcadia Group Brands Ltd v Visa Inc. [2015] EWCA Civ 883 (“Arcadia”), in which the Court determined that the pre-Damages Directive English limitation rules applicable to competition claims did not infringe the EU law principle of effectiveness.
In light of the above, the Court determined that Volvo and Heureka could not be followed under s.6(2) EUWA 2018 as the Court is bound to follow Arcadia.
The cessation of the Volvo limitation issue?
It remains to be seen whether the merchants will have the appetite to take this further, and if so whether the Supreme Court will have the appetite to revisit the issue so soon after Lipton.
In the meantime, the Court of Appeal’s decision means that claimants to UK proceedings seeking damages for infringements of competition law that began before 9 March 2017 will remain subject to the six-year limitation period under the Limitation Act 1980 (subject to any arguments regarding fraud, concealment or mistake under s.32).
The Court expressly stated that it was not necessary for it to reach a conclusion on the retrospective effect of Heureka as it affects current EU member states. The limitation position for limitation claims in English court governed by laws of EU member states therefore remains an open point.
For further information, please contact:
Sarina Williams, Partner, Linklaters
sarina.williams@linklaters.com
1 Directive 2014/104/EU, which required EU Member States to implement a Cessation Requirement (amongst other things) by 27 December 2016. In the UK, this requirement was incorporated into Schedule 8A Competition Act 1998 which applies a Cessation Requirement to competition claims which relate to an infringement of competition law that began on or after 9 March 2017 (paragraphs 19, 42 and 44 of Schedule 8A).
