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Parties sail to first ever collective settlement approval in Maritime Car Carriers claim


In a significant judgment handed down last week, the Competition Appeal Tribunal has for the first time approved a settlement reached between a class representative and a defendant to collective proceedings. The decision, described as ‘historic’ by The Lawyer, is an important milestone in the development of the UK’s class action regime for competition damages claims.

The settlement arose in McLaren v MOL (Europe Africa) Ltd and Others, an opt-out collective action brought on behalf of UK purchasers of motor vehicles against the addressees of the European Commission’s 2018 infringement decision in Maritime Car Carriers. The collective proceedings were certified by the Tribunal in May 2022.

In October 2023, the Class Representative and one of the Defendants, Compañía Sud Americana de Vapores S.A. (CSAV), made a joint application under section 49A of the Competition Act 1998 and Rule 94 of the Tribunal Rules for the approval of a £1.5m settlement agreement. The joint application was supported by extensive evidence from both the Class Representative and CSAV, including expert economic evidence and a report from independent legal counsel on the merits of the settlement.

The application was heard on 6 December 2023. The Tribunal concluded that the proposed settlement was “just and reasonable” within the meaning of s.49A and Rule 94, and made a collective settlement approval order accordingly. Key points arising from the hearing and the Tribunal’s decision include:

  • Whilst the Tribunal noted that it could not determine the precise value of the claim against CSAV at this stage, it was satisfied that the amounts agreed in terms of damages and costs were reasonable, as were the terms of the settlement.
  • The applicants had sought a ‘barring order’ which would prevent the non-settling defendants claiming contribution from CSAV. During the hearing, the Tribunal noted that there is uncertainty as to whether it has jurisdiction to make such an order, given the non-settling defendants’ rights under the Civil Liability (Contribution) Act 1978. However, the parties ultimately agreed a ‘barring order’ by consent, following exchanges before the Tribunal.
  • The Class Representative undertook to ‘carve out’ 1.7% of its damages claim to reflect the settlement with CSAV, and agreed that its claim against the non-settling defendants will be reduced further should the Tribunal ultimately determine that CSAV’s proportionate liability for damages is greater than 1.7% of the total.
  • The settlement agreement includes a so-called ‘reverter’ mechanism, whereby CSAV may recover the damages sum it has paid to settle the proceedings from amounts left unclaimed following distribution to the class. It provides that such ‘reversion’ will take place on a ‘first-in, last-out’ basis, whereby CSAV would recover the settlement sum it paid before any ‘reversion’ to defendants who settle later. The Tribunal concluded that this was a reasonable term of the settlement, but deferred consideration of the ‘reverter’ mechanism until any further application made to the Tribunal regarding unclaimed damages.
  • Given the settlement amount is relatively small as a proportion of the overall damages claimed, and the potential cost and complexity of distribution to the class, the Tribunal held that such distribution should be deferred until further order.

The judgment is here.

Sarah Ford KC acted for the Class Representative, instructed by Scott + Scott

Sarah Abram KC acted for CSAV, instructed by Wilmer Hale

Mark Hoskins KC and Michael Quayle acted for the non-settling defendants, instructed by Arnold & Porter, Baker Botts, Cleary Gottlieb Steen & Hamilton and Steptoe & Johnson

Jon Lawrence was instructed as an independent expert witness by the Class Representative and CSAV