Court of Appeal strikes out aspects of cartel claims based on economic torts

In the latest step in the long-running Air Cargo cartel damages saga, the Court of Appeal has struck out a large portion of the claimants' case brought on the basis of economic torts, amounting to around 60% of the claims. The court found that it was not possible to demonstrate any intent on the part of the cartelists to injure the claimants: Emerald Supplies Ltd and others v British Airways plc [2015] EWCA Civ 1024.

The claimants brought claims on the basis of the tort of breach of statutory duty based on breach of EU competition law rules (the usual route for claiming damages in such cartel cases) but also, in relation to claims that fell outside the scope of EU competition law rules, on the basis of two common law economic torts: (i) interference with the claimants' businesses by unlawful means; and (ii) conspiracy to injure the claimants by unlawful means. An essential element of both of these economic torts is that the defendant intended to cause loss to the claimants.

The Court of Appeal held that it could not be demonstrated that BA had intended to injure the claimants; this prospect was "entirely fanciful" and there was no need even to await disclosure to assess BA's subjective intention. A key part of the court's reasoning was that BA could have had no idea where any loss would ultimately fall – the claimants might have been able to pass the higher prices on further down the chain. It was not sufficient to say merely that the cartelists must have intended to injure anyone who might suffer loss as a result of their agreement (whether direct or indirect purchasers, or ultimately consumers, who could not pass-on any higher prices). This would open up "an unknown and unknowable" range of potential claimants and there could not be an intent to injure the particular claimant.

The Court of Appeal's judgment cuts down the scope for claimants to bring damages actions in the UK based on cartel behaviour not covered by EU competition law rules. In the same judgment, the court overturned an order requiring BA to disclose the confidential version of the EU Commission's air cargo cartel infringement decision into a confidentiality ring, on the basis that this did not comply with EU law rights. For more information, see our Competition, regulation and trade e-bulletin on the decision.