Court of Appeal rules that deal behind group action against truck manufacturers is not a damages-based agreement
On 5 March 2021, the Court of Appeal gave a landmark judgment which upheld a Competition Appeal Tribunal decision that third party litigation funding agreements (LFAs) do not constitute damages-based agreements and are legal.
UK Trucks Claim Limited is seeking to bring a collective action on behalf of tens of thousands of new truck purchasers against major truck manufacturers to recover the losses suffered by them as a result of the truck manufacturers’ anti-competitive activities. Calunius Capital is funding the claim.
The Court of Appeal was asked to consider whether funding agreements ‘entered into with claimants by third parties who play no part in the conduct of the litigation, but whose remuneration is fixed as a share of the damages recovered by the client’ count as damages- based agreements, which would therefore fall foul of regulation. In judgment, the Court of Appeal agreed with a Competition Appeal Tribunal decision from 2019, which found that the funding was not a DBA and was therefore legal.
National law firm Weightmans is acting on behalf of UK Trucks Claim Limited. Partner Laurence Pritchard comments:
“The judgment confirms the validity of the LFA put in place for the collective proceedings action brought by UK Trucks Claim Limited (UKTC) in the trucks cartel litigation. This confirmation is important, not only for the existing agreements that are already in place in ongoing litigation, but also for the new regime for collective actions in the Competition Appeal Tribunal.
“This judgment proves that the route we are taking to secure compensation for truck owners is the right and proper one. We look forward to moving forward with this claim, with the next hearing scheduled for April 2021.
“UKTC’s application is to bring an “opt-out” collective claim, by which all new truck purchasers and lessees are automatically included in the class action unless they choose to opt-out. To qualify as a class member a victim does not need to sign up to any funding agreement or insurance policy because UKTC has already put those arrangements in place.
“All truck owners who want to benefit from UKTC’s action need take no further action for the moment but are welcome to contact us for further information”