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Mastercard appealed to the Supreme Court.
The Supreme Court dismisses Mastercards appeal.
It agrees with the Court of Appeal that the CATs decision is undermined by error of law and sends Mr Merricks application for a CPO back to the CAT.
Lord Briggs gives the main judgment, with which Lord Thomas agrees.
Lord Kerr had agreed that the appeal should be dismissed for the reasons set out in Lord Briggs judgment prior to his retirement on 30 September 2020.
Three days before the judgment was initially due to be handed down, Lord Kerr sadly died.
The President of the Supreme Court re constituted the panel under section 43(4) of the Constitutional Reform Act 2005 to consist of Lord Briggs, Lord Sales, Lord Leggatt and Lord Thomas.
Lord Sales and Lord Leggatt give a combined separate judgment in which they disagree with Lord Briggs reasoning in part.
They do not dissent as they recognise that they were in the minority and the pure happenstance that Lord Kerr died after completion of the judgments, but just before they could be handed down, should not mean that the case has to be re heard due to an evenly divided panel [82 83].
Collective proceedings are a special form of civil procedure.
They are designed to provide access to justice and ensure the vindication of private rights where an ordinary individual civil claim would be inadequate for that purpose.
This purpose helps interpret the legal requirements of the certification process [45].
An important element of the background to collective proceedings is that courts frequently have to deal with difficult issues in calculating damages.
Courts do not deprive an individual claimant of a trial merely because of these quantification issues, provided there is a triable issue that the claimant has suffered more than nominal loss [46 47].
If these issues would not have prevented an individual consumers claim from proceeding to trial, the CAT should not have stopped the collective proceedings claim at the certification phase [56].
This fundamental requirement of justice that the court must do its best on the available evidence in relation to damages is the broad axe principle and it applies to competition cases [51].
Justice requires that damages be quantified in order to vindicate a claimants rights and to ensure that a defendant pays to reflect the wrong done, especially where anti competitive conduct may never otherwise be restrained if individual consumers are unable to bring claims [53 54].
Another important element is to understand the meaning of suitable, both under section 47B(6) of the Act which requires the claims to be suitable to be brought in collective proceedings, and in rule 79(2)(f) which says that they must be suitable for an aggregate award of damages.
Suitable means suitable relative to individual proceedings.
Therefore, the CAT should have asked itself whether the claims were suitable to be brought in collective proceedings as compared to individual proceedings, and suitable for an award of aggregate damages as compared to individual damages [56 57].
Against this background, the Supreme Court finds that the CAT made five errors of law [64].
First, it failed to recognise that in addition to overcharge, the merchant pass on issue was also a common issue (as the Court of Appeal had found and which was not appealed to the Supreme Court).
This should have been a powerful factor in favour of certification (rule 79(2)(a) of the CAT Rules) [66].
Second, the CAT placed great weight on its decision that the case was not suitable for aggregate damages.
This is a relevant factor for certification, but it is not a condition [61, 67 69].
Third, the CAT should have applied a test of relative suitability.
If the forensic difficulties would have been insufficient to deny a trial to an individual claimant, they should not have been sufficient to deny certification for collective proceedings [70 71].
Fourth (the most serious error), the CAT was wrong to consider that difficulties with incomplete data and interpreting the data are a good reason to refuse certification.
Civil courts and tribunals frequently face problems with quantifying loss and the CAT owes a duty to the class to carry out the task in a case of proven breach of statutory duty coupled with a realistically arguable case that some loss was suffered [72 74].
Fifth, the CAT was wrong to require Mr Merricks proposed method of distributing aggregate damages to take account of the loss suffered by each class member.
A central purpose of the power to award aggregate damages in collective proceedings is to avoid the need for individual
assessment of loss and the Act expressly modifies the ordinary requirement for the separate assessment of each claimants loss [58, 77].
Lord Sales and Lord Leggatt agree with Lord Briggs that the CAT was wrong to refuse certification on the distribution issue [148 150].
However, they disagree on the suitability for aggregate damages issue.
They consider that the CAT applied the test to determine the suitability of a class of claims for an aggregate award of damages under section 47C(2) of the Act correctly and thus the CAT was entitled to conclude that the claims were not suitable to be brought in collective proceedings [167 169].
Their key reasons are at [111, 116 119, 121, 124, 153, 156 166].
In this appeal, the Supreme Court is asked to decide whether findings of fact made by the General Court of the European Union (the General Court) are binding in subsequent domestic proceedings, under the EU principle of absolute res judicata.
The appellants (collectively known as Servier), developed and manufactured the drug Perindopril, which is used to treat cardiovascular diseases including high blood pressure.
Perindopril falls within the class of medicines known as angiotensin converting enzyme inhibitors (ACE inhibitors).
The respondents, who are the claimants in the domestic proceedings, are the national health authorities of England, Wales, Scotland and Northern Ireland.
Between May 2011 and September 2012, the claimants issued proceedings in England and Wales which alleged that Servier had: (i) breached article 101 of the Treaty on the Functioning of the European Union (TFEU) and/or Chapter 1 of the Competition Act 1998 (the 1998 Act) by entering into anticompetitive agreements with p...
The claimants contend that this allegedly unlawful conduct has delayed the entry of cheaper generic versions of Perindopril onto the UK market, which has, in turn, caused the claimants to suffer substantial financial loss.
Serviers conduct relating to Perindopril was investigated by the European Commission (the Commission).
On 9 July 2014, the Commission issued a decision which found that Servier had infringed articles 101 and 102 TFEU.
Servier appealed to the General Court seeking the annulment of the Commissions decision.
The General Court judgment upheld all but one of the Commissions findings of infringement of article 101 TFEU, but found that Servier had not infringed article 102 TFEU.
This was because the relevant product market was not limited to Perindopril but extended to ACE inhibitors generally, and Servier did not have a dominant position in that wider market.
Both the Commission and Servier have appealed to the Court of Justice of the European Union (CJEU).
As there are significant overlaps, the domestic proceedings cannot proceed to a final trial until the EU proceedings have been resolved.
However, in October 2016, Servier was granted permission to plead that the claimants failed to take reasonable steps to encourage switching from the prescription of Perindopril to cheaper generic ACE inhibitors.
Servier asserts that, even if liability and causation are established, the claimants damages should be reduced or extinguished: (i) because the claimants failed to mitigate their loss; (ii) for contributory negligence; and (iii) because the losses claimed are too remote.
It was determined that there should be a trial of preliminary issues relating to this argument.
Servier argued that certain findings in the General Court judgment in particular concerning the extent to which Perindopril can be substituted for other ACE inhibitors are binding on the domestic courts in the preliminary issues trial.
However, both the High Court and the Court of Appeal held that none of the findings relied on by Servier constituted res judicata for these purposes.
Servier appealed to the Supreme Court.
It claimed that the point of law is uncertain, not acte clair, and that the Supreme Court should therefore refer the question to the CJEU under article 267 TFEU.
The Supreme Court unanimously dismisses Serviers appeal.
It holds that the General Court findings Servier relies on are not binding in the domestic proceedings, and declines to make a reference to the CJEU.
Lord Lloyd Jones gives the judgment, with which all members of the Court agree.
The EU principle of absolute res judicata only applies to judicial decisions which have become definitive, either after all rights of appeal have been exhausted or after the time limits for exercising those appeal rights have expired.
The General Courts findings are not yet definitive, and may never become definitive, because they may be reversed or rendered redundant in the appeal pending before the CJEU.
The findings are not, therefore, binding in the domestic proceedings under the EU principle of absolute res judicata.
A reference to the CJEU is unnecessary to decide the issues in this case [31 32].
The Court nevertheless sets out its views on the underlying issues of law, in the hope that they might assist at later stages of the domestic proceedings [32].
The leading authority on the EU principle of absolute res judicata is P&O European Ferries (Vizcaya) SA and Diputacin Foral de Vizcaya v Commission (Joined Cases C 442/03P and C 471/03P) [2006] ECR I 4845 [33 37].
This explains that, where the EU courts have annulled a Commission decision on substantive as opposed to procedural grounds, the substance of that judgment becomes binding on all the world, not just on the parties.
This ensures stability of legal relations, because it means that a matter which has been definitely settled by judicial decision cannot be referred to the courts by different parties for reconsideration [38].
The purpose of the EU principle of absolute res judicata is to prevent the annulling judgment from being called into question in subsequent proceedings.
This purpose provides the key to the principles scope and applicability [38, 42].
Absolute res judicata gives dispositive effect to the judgment itself.
It therefore extends to the essential reasons for the judgment (or ratio decidendi), not just to the outcome set out in the operative part [39 40].
Only those aspects of the judgment which explain why the Commission decision has been annulled form part of the ratio decidendi, because those are the aspects which must be respected to prevent the annulling judgment from being called into question later on [42].
The General Court judgment annuls the Commissions finding that Servier had infringed article 102 TFEU, on the basis that the Commission was wrong to conclude that the relevant product market was limited to Perindopril, as opposed to all ACE inhibitors.
The General Court made a number of findings of fact in this regard, including those Servier relies on.
Accordingly, if the General Court judgment becomes definitive and it can be shown that the relevant findings were an essential basis of that judgment, it would not be possible to challenge those findings in later proceedings which sought to contradict the General Courts conclusions on the relevant product market within...
It is not necessary to treat the General Courts findings as binding in any other legal context.
If the CJEU upholds the General Court judgment that Servier did not infringe article 102 TFEU, the claimants will no longer pursue their article 102 claim.
In any case, at present, the domestic proceedings do not concern the relevant product market for the purposes of that article.
Instead, Servier relies on the General Courts findings to support its defence based on mitigation of loss flowing from alleged anti competitive agreements contrary to article 101 TFEU.
The General Courts findings cannot be detached from the authority of the annulling judgment and deployed in this wholly different context [48].
Servier contends that the General Courts findings are binding in any EU law proceedings which raise the same factual issues [47].
The Supreme Court rejects this argument because it is not supported by the EU or domestic case law [49 60].
This is not surprising, because it would be inconsistent with the purpose of the principle of absolute res judicata [49].
Serviers proposed approach also raises practical difficulties because it has no workable defined limits.
More generally, if it is confined to the context of the consequences of an annulling judgment, the principle of absolute res judicata promotes legal certainty, the effective judicial control of EU institutions and the maintenance of the EU legal order.
However, once freed from this restriction, it could operate in way that is arbitrary and unjust, binding persons not party to the original dispute in a wholly different legal context in a way which would be inconsistent with the principles of a fair trial [61].
The claimants claims in the domestic proceedings do not call into question or undermine the General Court judgment or its consequences in any way, nor do they contradict the General Courts decision as to what needs to be done to comply with EU law.
The Supreme Court is therefore satisfied to the standard of acte clair that the EU principle of absolute res judicata does not apply [62].