{"id":261245,"date":"2025-08-13T08:01:36","date_gmt":"2025-08-13T08:01:36","guid":{"rendered":"https:\/\/dominiclevent.com\/blog\/?p=261245"},"modified":"2025-08-13T08:01:59","modified_gmt":"2025-08-13T08:01:59","slug":"competition-appeal-tribunal-cat-rules-on-how-far-it-can-go-to-make-litigation-affordable-for-small-companies","status":"publish","type":"post","link":"https:\/\/dominiclevent.com\/blog\/competition-appeal-tribunal-cat-rules-on-how-far-it-can-go-to-make-litigation-affordable-for-small-companies\/","title":{"rendered":"Competition Appeal Tribunal (\u2018CAT\u2019) rules on how far it can go to make litigation affordable for small companies"},"content":{"rendered":"\n

How far should the Competition Appeal Tribunal (\u2018CAT\u2019) go in shaping its proceedings in a way that makes it affordable for the claimant to pursue its claim?\u00a0 That was the question at the heart of the CAT\u2019s judgment this week, deciding on case management issues in Yew Freight Trading Limited v Puro Ventures Limited <\/em><\/a>[2025] CAT 46.<\/p>\n

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The proceedings are a claim by a company, Yew Freight, concerning arrangements operated by the defendant, Puro Ventures, relating to the UK-wide promotion and supply of courier services under Puro Ventures\u2019 brand, \u2018Speedy Freight\u2019.\u00a0 Yew Freight is one of a number of \u2018franchisees\u2019 appointed by Puro Ventures in respect of assigned exclusive territories.\u00a0 Each franchisee operates a call centre, and carries out marketing, with a view to serving customers located within its assigned territory.\u00a0 Franchisees may also themselves operate vehicle fleets and carry out collections and deliveries.\u00a0 However, customers\u2019 contracts, relating to courier services orders they have placed through a franchisee\u2019s call centre or online facility, are between the customer and Puro Ventures, rather than being between the customer and the franchisee.<\/p>\n

By its claim, Yew Freight alleges that Puro Ventures has operated, and is continuing to operate, policies which unlawfully restrict \u2018passive sales\u2019 by franchisees to customers located outside the franchisee\u2019s assigned territory.\u00a0 Yew Freight\u2019s primary case is that those policies constitute an \u2018infringement by object\u2019, such that the policies can be recognised as constituting an agreement that restricts competition, and is thus caught by s.2 of the Competition Act 1998 (\u2018CA98\u2019), without it being necessary for anti-competitive effects to be shown.<\/p>\n

Puro Ventures denies this, contending that: (a) its policies are not an infringement \u2018by object\u2019; (b) the policies do not produce anti-competitive effects; alternatively, (c) even if the policies are caught by s.2 CA98, they qualify for exemption under s.9 CA98.<\/p>\n

Yew Freight is a considerably smaller company than Puro Ventures and estimates the financial value of its claim to be \u00a3240,000.\u00a0 Against that background, Yew Freight asked the CAT to take several case management measures to limit the costs risks to which Yew Freight would be exposed by pursuing its claim.\u00a0 The measures sought by Yew Freight included: (i) a split trial arrangement under which the question whether Puro Ventures policies constituted an \u2018infringement by object\u2019 would be tried first, with no or limited economic evidence, leaving other issues, including Puro Ventures claim to exemption under s.9 CA98, to be tried subsequently, if necessary; (ii) allocation of the proposed first trial to the CAT\u2019s fast-track procedure, with that trial being listed to start within the next 6 months; and (iii) a cost-capping order to limit the amount that Yew Freight could have to contribute to Puro Ventures\u2019 costs if the claim was unsuccessful.\u00a0 Puro Ventures opposed those proposed measures, submitting that the appropriate approach was for the CAT to ensure that both parties\u2019 costs were budgeted strictly.<\/p>\n

The CAT panel (comprised of Andrew Lenon KC, Rosalind Kellaway and James Wolffe KC) considered the parties\u2019 rival proposals at a case management hearing on 26 June 2025.\u00a0 At that hearing, the CAT received detailed submissions both on: (i) the case law on the concept of \u2018infringement by object\u2019; and (ii) the appropriate principles for determining whether an action should be allocated to the fast-track procedure and\/or subject to a cost-capping order.<\/p>\n

In its judgment following that hearing, the CAT declined to order the case management measures proposed by Yew Freight.<\/p>\n

In respect of the split trial proposal, the CAT decided that, having considered the case law on the concept of \u2018infringement by object\u2019, this was a case in which some expert economic evidence would be needed for assessing whether Puro Ventures\u2019 policies were caught by that concept.\u00a0 Given that economic evidence would also be needed for considering Puro Ventures\u2019 claim to exemption under s.9 CA98, all issues necessary for enabling the CAT to decide whether Puro Ventures\u2019 policies have contravened competition law should be considered at one trial.<\/p>\n

In respect of the other measures proposed by Yew Freight, the CAT decided that, as the first trial could not be held within 6 months, the proceedings did not qualify for being allocated to the fast-track procedure.\u00a0 That being so, there was no requirement for the CAT to make a cost-capping order.\u00a0 The CAT considered whether it should exercise its discretion to make a cost-capping order and, for that purpose, applied the principles developed in the High Court of England and Wales for deciding whether to make such an order in civil proceedings.\u00a0 Applying those principles, the CAT decided that the fact that the claimant had limited financial resources and might not be able to continue the proceedings if no cost-capping order was made, was not sufficient reason to make such an order.\u00a0 The CAT would, however, ensure that both parties\u2019 costs were carefully budgeted and controlled to ensure that they were proportionate.<\/p>\n

Monckton barristers represented both parties: Julian Gregory<\/a> for the Claimant (instructed by Nexa Law), and Alan Bates<\/a> for the Defendant (instructed by Knights PLC).<\/p>\n<\/div>\n\n

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