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Major Group Action Against Truck Manufacturers Likely to Exceed £1billion

The Road Haulage Association (RHA) has appointed Addleshaw Goddard to work in collaboration with pre-eminent transport and logistics law firm Backhouse Jones and barristers from Exchange Chambers and Brick Court Chambers in a planned action that will see collective proceedings brought against truck manufacturers to recover damages resulting from a 14-year cartel. The RHA will bring the claim as the representative of the UK haulage sector and those truck operators who have suffered loss.

In July 2016, DAF, Daimler (Mercedes), Iveco, MAN and Volvo/Renault all admitted to having participated in a 14-year illegal price-fixing cartel, between 1997 and 2011. Scania denied any wrongdoing but, following an investigation by the European Commission, was also found to have participated in the cartel. Collectively, the truck manufacturers were fined more than €3.8 billion. Those fines are the largest ever imposed by the European Commission in this type of case.

The RHA announced its intention to bring collective proceedings in August 2016, a month after the European Commission issued its first decision in the case. The RHA subsequently set up a website on which operators can register their interest and sign up. Since mid-July this year when the website went live, over 2,400 operators have signed up, representing an estimated 150,000 trucks sold or leased during the cartel period. A further 650 operators have registered their interest and are in the process of signing up.

An application for a collective proceedings order (CPO) will be lodged with the Competition Appeal Tribunal (CAT) seeking authorisation of the RHA as class representative and certification of the class of operators entitled to opt into the claim. If successful, this will be the first CPO application to be granted under the new collective proceedings regime, which was introduced in October 2015. The two previous applications under this regime against Pride Mobility Products Ltd (mobility scooters) and Mastercard (payment card interchange fees) were both rejected by the CAT at the certification stage.

The claim is fully funded by Therium Capital Management Limited and has the benefit of After the Event Insurance, allowing claimants to participate in the collective proceedings without contributing their own funds.

The Backhouse Jones team is being led by Steven Meyerhoff, Jonathon Backhouse, and Ian Jones.

The Addleshaw Goddard team is being led by Mark Molyneux and Bruce Kilpatrick.
The Counsel team includes competition law barristers David Went from Exchange Chambers and James Flynn QC (Brick Court Chambers) together with Mark Cawson QC and Stephen Connolly also from Exchange Chambers .

Steven Meyerhoff of Backhouse Jones said: “Any truck operator that has bought or leased a medium or heavy truck since 1997 stands to be compensated through the RHA’s proposed claim. Looking at the number of operators already signed up, which is increasing by the day, we expect the overall value of the RHA’s claim to exceed £1 billion.”

David Went of Exchange Chambers said: “We are taking this case to the CAT as the specialist court in the UK that deals with claims of this type and will be using the new collective proceedings regime that has been specially designed to facilitate large-scale competition damages claims. The first step involves asking the CAT to authorise the RHA to act as industry representative and to set out the basis on which operators can opt into the claim. Given that the claim will be on an opt-in basis, we do not envisage the proceedings being beset by the same difficulties encountered with the two previous failed attempts to obtain certification.”

Bruce Kilpatrick of Addleshaw Goddard, commenting on the action, said: “Private enforcement is on the rise by customers who have suffered loss as a result of anti-competitive activity and this includes attempts to make use of the new collective proceedings regime. This case has significant implications for a wide range of claimants, from individual truck owners to major businesses with significant transport and logistics activities. Anyone who purchased or leased medium or heavy trucks during the period of the cartel and for a period afterwards is entitled to join the claim.”

Mark Molyneux of Addleshaw Goddard, commented: “We are looking forward to working with the RHA and its existing legal team on this extremely important claim. This is a claim that potentially will be the first to get approval under the CAT’s collective proceedings regime, and will be significant not just for the RHA and individual claimants, but because it will set the benchmark for future cases and enable businesses to seek redress for losses they have suffered as a result of anti-competitive activity.”

RHA Chief Executive Richard Burnett said: “UK truck owners affected by the truck cartel have potentially paid too much for their lorries over a 14-year period and we’re determined to get a fair deal for them. This is a chance to get compensation with no risk to their business or finances. As the representative body with sole responsibility for the UK haulage sector, we are duty-bound to act on behalf of our members’ wishes. They have made it clear that they feel angry about the truck cartel and want us to represent them. Our legal team at Backhouse Jones, Exchange Chambers, Brick Court Chambers and now Addleshaw Goddard will seek the best compensation deal that we can on behalf of our members and others affected by this cartel. To ensure that as many affected hauliers are able to join the claim, we have secured funding from Therium Capital Management Limited and the largest tranche of After-The-Event insurance that’s ever been underwritten, so there’s no cost to joining the claim or other risks if the claim is unsuccessful.”

Early indications are that compensation could be in the region of £6,000 per truck on average across different truck sizes. Businesses that have purchased or leased new or second-hand trucks direct from the relevant manufacturers or from dealers from 1997 onwards are eligible to join the claim. It is estimated that, during the period of the cartel, around 650,000 new trucks were sold. Non-RHA members are also able to join the claim.

For further information on joining the claim please visit https://www.truckcartellegalaction.com/

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