Transcript Lessons from recent follow-on damages cases:

LESSONS FROM RECENT FOLLOW-ON
DAMAGES CASES:
THE DOW AND NATIONAL GRID LITIGATION
Daniel Jowell QC, Brick Court Chambers
Daniel Beard QC, Monckton Chambers
Dr Cristina Caffarra, Charles River Associates
23 September 2014, Herbert Smith Freehills LLP
NATIONAL GRID V ABB & ORS
DANIEL BEARD Q.C.
COOPER TIRE V DOW
DANIEL JOWELL Q.C.
The drunken woman and her dog,
the blindfolded man walking across a bar,
and the man looking for his keys under
the lamppost…
A tale of cartel overcharges
Cristina Caffarra, 23 September 2014
Issues
• Complexity
• Link between quantitative analysis and factual evidence
• Prior beliefs
Synthetic rubber
Jan 92 Jan 94 Jan 96 Jan 98 Jan 00 Jan 02 Jan 04 Jan 06 Jan 08 Jan 10
price
cost
excess demand
GIS: Choice of index makes overcharge find more likely
Deflating by wrong index can lead to
finding overcharge when none exists
Deflated using correct cost index: no overcharge
5
6
Deflated using incorrect cost index:
positive overcharge
4
Price
7
8
Indices with steep s-shape make
finding overcharge more likely
1990
1995
2000
2005
2010
Year
Observed (Nominal) prices
Correctly-deflated prices
Deflated prices with overly-steep index
2015
RELEVANT FACTUAL EVIDENCE ON
OVERCHARGE
• Nature of the cartel: were the terms clear and specific?
• Transparency: could adherence to the cartel be
monitored?
• Buyer power/buyer resistance
• Substitute products outside cartel (e.g. natural rubber)
• Existence of producers within the region outside the
cartel (Kaucuk/TS)
• Import of the products from outside the region
• Non compliance/cheating; absence of enforcement
THE DEUTSCHE BAHN ISSUE
• Original Commission decision: Kaucuk and Trade Stomil cartelists
• Original pleading: Kaucuk and Trade Stomil defendants
• Case T-44-45/07, T-53/07 General Court: Kaucuk and Trade Stomil
not cartelists
• Amended pleading: claim against Kaucuk and Trade Stomil
withdrawn, but umbrella claim in respect of their sales against
other Ds
• Case C-557/12 Kone
• Deutsche Bahn [2014] UKSC 24 esp. paras. 27-28
• Re-Amended pleading: Dow jointly and severally liable for K and TS
sales
• Cooper Tire v Dow Deutschland [2014] EWHC 1578 (Comm) –
amendment allowed, no reference yet as “no doubts” as to
Supreme Court’s approach
PASS ON ISSUES IN NATIONAL GRID
DANIEL BEARD Q.C.
Indirect purchasers/passing on
BIG plc
Bad plc
Ugly plc
x + £1
x + £1
Passin’ Thru LTD
Low Margin Co.
y + £1
Kind Ltd
y
Sweet Ltd
y
Innocent Ltd
Indirect purchasers/passing on
Beautiful plc
Bountiful plc
x + £1
x + £1
Buyer power inc
Optimist
Unjustified
criticism plc
Mega dist co.Y
Fleecer
Chancer
Indirect purchasers/passing on
Beautiful plc
Bountiful plc
Unjustified
criticism plc
x + £1
Buyer power inc
Regulatory controls
Pretty much everyone
a ladder
SETTLEMENT TACTICS
QUESTIONS?