The Long Arm of the Bribery
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8 The Lawyer | 30 July 2012 Opinion On 5 July the Competition Appeal can be awarded where compensatory Holdvery Tribunal (CAT) handed down its damages alone would be insufficient judgment in the Cardiff Bus case, to punish the defendant for ‘outra- awarding damages in a ‘follow-on’ geous conduct’ including, as in this tightplease, claim for the first time. This is also case, when the defendant was or the first case in which exemplary should have been aware that its con- claimants damages for a breach of competition duct was probably illegal. law have been awarded. The CAT also stated that when ex- Award of exemplary In January 2011, 2 Travel brought a emplary damages are considered claim against Cardiff Bus following a they should have some bearing to the Y damages in Cardiff 2008 decision of the Office of Fair M compensatory damages awarded – in A L Bus case raises the Trading (OFT) which found that, by A this case, awarding exemplary dam- engaging in predatory conduct, Wheels of justice go round and round ages about twice the size of the com- stakes for claimants in Cardiff Bus had infringed the Com- pensatory award – and that they damages actions petition Act by abusing a dominant awarded damages for loss of profits should have regard to the economic position in the market. In particular, (of £33,818.79 plus interest) and also size of the defendant to be “of an when 2 Travel launched a no-frills exemplary damages of £60,000. order of magnitude sufficient to bus service, Cardiff Bus introduced Notwithstanding the low value of make the defendant take notice”. its own no-frills service on the same the damages awarded, this was a While the CAT concluded that it routes and at similar times of the day, landmark judgment and shows the was “under no illusions that this with exclusionary and predatory willingness and ability of the CAT to judgment is likely to incentivise the intent. Shortly after 2 Travel’s exit deal with complex issues of causa- bringing of claims for exemplary from the market, Cardiff Bus with- tion and quantification of losses in damages in competition cases”, in drew its own no-frills service. the context of damages claims in reality it is unlikely that they will be In its claim before the CAT 2 Travel competition cases. awarded in many cases. Therefore, Marc Israel, head of claimed for losses under a number of Although 2 Travel’s claim was be- while this landmark judgment is no competition, Macfarlanes heads including loss of profits, loss of fore the CAT, the circumstances in doubt good news for potential capital asset, loss of commercial op- which it considered exemplary dam- claimants considering competition- portunity, wasted staff and manage- ages to be appropriate are likely to based damages actions in the UK, it is ment time, and liquidation costs. apply equally to competition claims unlikely to open the floodgates. It 2 Travel also claimed exemplary before the High Court. does, however, raise the stakes. damages, whose purpose is to ‘pun- That damages were awarded on an Nikos Dimopoulos, a solicitor in ish and deter’ the defendant in addi- exemplary basis is particularly note- Macfarlanes’ competition team, 8 The Lawyer | 30 July 2012 tion to compensatory damages that worthy. While the primary purpose of assisted with this article 8 Opinion might be awarded. Although the CAT a damages award is to compensate a G For moreTohnethLaiswtyoepric| ,3s0eJeuClyas2e0o1f2 Opinion dismissed most of 2 Travel’s claims it claimant’s loss, exemplary damages the Week, page 13 On 5 July the Competition Appeal can be awarded where compensatory The BTrirbiberuynAaclt 2(0C1A0Ta)ssehratsntdhedUKd’sown its Kenya, TanzadnaiamaangdeUsgaalonndae.would be insufficient HoldveryOn 5 July the Competition Appeal The act covers offencescan be awarded where compensatory The long jurisdjuicdtigomn oevnetr oinffenthcesCcoamrdmififtteBdus case, The Britishtsoubpjuecnticsahtetghoerydceofveenrsdant for ‘outra- Tribunal (CaAnTyw) hhearenidnetdhe wdowrldnbyitms illions of damtahgoesse awlhonoeatwtohueltdimbe oinf sthueffBicriietinsht Holdvery awarding damages in a ‘follow-on’ geous conduct’ including, as in this judgment inindthiveidCualrsdwifhfoBaurse nceaisteh,er British committed by millionsto pNunatiisohnatlhitey Adcetf1e9n4d8awnetrefoprot‘eonuttiarall-y tightplease, claim for the first time. This is also case, when the defendant was or arm of thawearding dacimtizaegness ninoraor‘fdoinllaorwily-orne’sident in geoucsiticzoensduocfta’ inthcelnu-dCionmg,maosniwnetahlitsh the first case in which exempwlahryo are neither British should have been aware that its con- tightplease, claim for thtehefiUrsKt.time. This is also casec,ouwnhteryn, btuhtehdaedfennodt aynett awcqausiroerd damages for a breach of competition duct was probably illegal. BclraimiberaynAthtsecfirtst caseUinndewrhthicehacte,xUeKmcpoluarrtys can have shouthldathsatvaetubse. eAn1a9w80arwehtihteatpiatpsecroans-- law have been awarded. citizens nor ordinarily The CAT also stated that when ex- claimants damages forjuarbisrdeiacctihonofocvoemr pinedtiitviiodnuals who: ductsewsasesdptrhoebiranbulymilblergaatl.50,000. offer orIpnaJyaanubrairbye;2r0e1c1e,i2veTarabvreibl be;rought a The Britishepmroptleacrtyeddpaermsoangceastea- re considered LAawwayerdrsomf uexstetmaklapewlaharvye been awarded. resident in the UK The CAT also stated that when ex- offercolrapiamy agbariibnesttoCaafrodreififgnBupusbfolilclowing a gory covers ptehoepylesbhoorunlidnhoanveeosfothmee bearing to the In January 2011, 2 Travel brought a emplary damY ages are considered Award of ecxdaearemmtopalegasertsayibnlisChatrhdeiff offici2al0; 0or8ovdeercaiseionnioromf athnaegOerfwfihcoe of Fair former BritiM shcopmrotpeecntosraattoersy–dsuacmhaagses awarded – in A claim against Cardiff Bus following a they should haL ve some bearing to the connives or consents to the payment Islands, Gibraltar, and the Turks and the MaldivA es, Tonga, New Hebrides status of clients Trading (OFT) which found that, by Y this case, awarding exemplary dam- damages inBCusarcdaisfef raises20th08edecision of the Office of Fair M compensatory damages awarded – in of a bribe. But the UK courts only Caicos IsWlahnedesls. oBfrjuosatdiclye gsopreoaukniA ndga,nd r(onuonwdVanuatu) and Sharjah – who engaging in predatory conduct, L ages about twice the size of the com- when advising onTrading (OFhTa)vwe jhuricishdifcotuionndiftthhaeto,fbfeynces were much of the population of thA estehiswcaerseen, aowt aabrldeitnogobetxaeinmcpitliazreynsdhaipmin- Bus case rasitsaeksetshfeor claimants in Cardiff Bus had infringed the Com- pensatory award – and that they engaging iwnhopllryedoar tpoarrytlyccoonmdmuicttt,ed iWn htheels opf jluacsetiscwe gilol broeuBnridtiasnhdovroerusnedas territoa-gesthaebonuewt tlywiincdeetpheensdieznetocfotuhnetrcioems. A- the UK Bribery Act petition Act by abusing a dominant awarded damages for loss of profits should have regard to the economic damages actionCasrdiff Bus UhKad, oirniffrtihnegeinddtihvieduCaolmin-question ries citizens. pens19a7t7orgyreeanwpaarpder–assaenssdedtthhaetir nthuemy- stakes for claimants in position in the market. In particular, (of £33,818.79 plus interest) and also size of the defendant to be “of an petition Acthbays aa‘bcluossiencgonandeocmtioinn’awnith thaewUaKr.ded dBarmitisahgnesatfionralol (sosveorfseparso)fsittastus isshoubledr ahta2v7e4,r0e0g0a.rd to the economic damages actions when 2 Travel launched a no-frills exemplary damages of £60,000. order of magnitude sufficient to position in tIhteismthaisrkteestt.tIhnatpeaxrtteincduslathr,e rea(ochf £of33,8h1e8l.d79bypalubosuint htearlfetsht)eapnodpuallastoion osfize oEf vtehnebdefeofreenthdeanactt,tforobme2“0o0f2 tahne the acbtu. s service, Cardiff Bus introdHucoendg KongN. oItwwiaths satvaanildaibnleg tfhroemlowUvKal’suceoorrfuptmionakoefftehnecdesef(estnadtuatnotrytake notice”. when 2 Travel launched a no-frills exemplary damages of £60,000. order of magnitude sufficient to Thietstwoowmn onsot-ofrbivllisousesrcvloicse oconnt-he s1a9m86eto 1t9h9e7 dtoamallagtheosseawwahrodehda,dthiasndwcaosmamon laWw)heixletenthdeedCtAoTthcesoencluded that it bus service,nCecatridrooinfusfteBasureasniBdnrtairttiosdhimucilieatidrzteinmseasNnoodfttwheiBtdrhiatsiyts,ahnddelipanengnddtmheneatrltkoewrjruivtdoagrlimueseecnoitftizaennmd- askhseoawmthseectdaheteefgeonrdwieaasnsotft“Baurkinteidsnheorntainctieoo”n.iall.uItsions that this its own no-ftrhilolsewsoeirrtdvhiincaerxiolcynlurteshsiieodnseanmtryinetahnetdUhKep. rdeadmashtaoigpreybsyavwirtaiulrledinoegfdnt,heetshisriacsonnwdnaaesbcitaliiotnytoof tWhfehoiClloeAwTtshtteohaCtAtjhTuodscgeomandcevlniustidnisegdloikntehlliayatbtiolt-incentivise the routes and at sOimthiinelartrecntaitme.geSoshroiefrstahlyree:adBfatryei,tris2hloTavnreadrv-mela’srHkeoxnjuigtdKgomndge,naaltnwdaniwtdhoschaopompwlpiseldethxfoeirsistu. wesasoift“ycuuannuddseearr- Ennogblriisilnhlugasininotgin-bsoriftbhecarlytailemthgsiiss-for exemplary with exclussieoans atferroyrmitoarntihedsecmpitriazeredknaest;to,BrCryitairsdhwioffvilelBrin-ugsnweisBtshrai-tnisdhtaioobvnieliratsyenaodsfqcthuiteaiznCetnAifTiscttaottuiosnijsuodfgllomatsiesoennstmisnalyikneedleaydmttooaigenencsqeuinnirteicvaoissmetopttheheteition cases”, in seas citizens; British nationals (over- broadly held by three categories of nationality and status of individuals. intent. Shortly adfrteewr 2itsTorwavnenl’os-efrxiillts sedrveiaclew. ith comptlhexe icsosunetesxotfocfaudsaam- agebsricnlgaiinmgs oinf clariemalsityfoitr isexuenmlikpelalyrythat they will be Patrick Doris, partner, seas); British