Granville Court of Appeal confirms no room for ‘caution’ when swinging the broad axe, and gives significant guidance on pass-on

01/04/26

The Court of Appeal today handed down judgment in Granville v LG Display [2026] EWCA Civ 409 (available here). The judgment under appeal had found the (insolvent) claimant computer retailers to have suffered a total £4.4mn loss in a follow-on claim for damages caused by a cartel in LCD panels. Once previous settlements had been taken into account, this left £942,000 to be paid by the remaining defendants.

In quantifying those losses, the judge had referred in his judgment to “the cautionary approach” in Asda [2017] EWHC 93 (Comm), that in the face of uncertainty a court applying the broad axe “should err on the side of under-compensation”. This approach had been rejected by the Court of Appeal in Britned [2019] EWCA Civ 1840. The claimants drew this error to the judge’s attention between circulation of the judgment in draft and its hand-down. Following that, the judge added a footnote explaining that he “had not consciously made any adjustments applying this principle”, but in any event since being informed of the error he had reviewed each of his conclusions and determined no adjustments to the figures were required.

The claimants appealed on three grounds:

1. That the judge erred by applying the cautionary approach;
2. That the judge had made “clear and obvious” errors in determining the overcharge; and
3. That the judge had failed to apply the test of “direct and proximate causal link” when determining pass-on.

On the cautionary approach, the Court commended the judge’s frankness in his footnote, but concluded that the drafting of the judgment did indicate an erring on the side of under-compensation in certain respects. The Court of Appeal therefore substituted its own assessment of overcharge and pass-on for the judge’s assessments. It increased the overcharge figures for monitors, notebooks and TVs from 8%, 4% and 14% to 10%, 6% and 16% respectively. It decreased the downstream pass-on figure from 65% to 60%.

The Court otherwise rejected the claimants’ grounds of appeal. On overcharge, the judge had been entitled to prefer the modelling choices that he did, which broadly accorded with the LG Display defendants’ expert’s evidence. Nor could the judge be criticised for not adopting a “blended” approach taking into account a variety of different (“inferior”) models, if he accepted that components of the LG Display defendants’ model were the best available.

On pass-on, the Court of Appeal clarified that “the legal test for factual causation in the context of an issue about downstream pass on is whether there is a direct and proximate causative link between the overcharge suffered by the claimant and the prices charged by the claimant to its downstream customers. In other words, it is necessary to focus on why a claimant’s prices to its customers are as they are.”

If the products sold by the claimants are “the same products” or “products equally affected” by the overcharge, proof of factual causation will be “relatively straightforward.” There is then “no policy reason to prevent effect being given to the defence of downstream pass on as a matter of legal causation.” If the products sold by the claimant are “materially different” from those subject to the overcharge, factual causation will be much harder to prove. However, there too, “the issue remains one of evidence and proof, rather than legal policy, so that if the necessary factual link can be proved, there is no policy reason to exclude the defence.”

In circumstances where the claimants’ products included the same screens as were sold by the defendants, albeit as individual components of a larger package, the necessary link could be established by showing that the claimants’ prices were higher than they would otherwise have been, and that this was because of the overcharge.

The evidence before the judge – comprising the documentary material that had survived since the claimants’ insolvency, together with expert evidence – provided a sufficient factual foundation for the judge’s conclusion that there had been some pass-on. He was entitled to give such weight as he thought appropriate to the expert evidence, which was not merely “broad economic theory”, but rather was concerned with the particular features of the market in which the claimants operated and the functioning of their specific businesses.

The judgment also serves as a useful reminder that appellate courts will be slow to interfere with a judge’s findings of fact arrived at in light of extensive expert evidence. The Court indicated that, where the evidence has narrowed the assessment down to a ‘range of uncertainty’ within which it must wield the broad axe, an award of “an amount somewhere approximately in the middle of the range” is unlikely to be open to challenge.