Automated Summary
Key Facts
Belle Lingerie Limited (BL) claims Wacoal EMEA Ltd and Wacoal Europe Ltd unlawfully restricted competition through resale pricing and online sales policies, causing damages of £3.5m–£7.7m. The Competition Appeal Tribunal rejected BL's fast-track procedure (FTP) application but approved costs management. BL sought a costs capping order (CCO) limiting defendants' recoverable costs to £450,000, but the Tribunal dismissed this application, finding no substantial risk of disproportionate costs and sufficient control via budgeting and assessment. The case is split into two phases, with Phase 1 addressing liability and injunctive relief.
Issues
- The parties' costs budgets were scrutinized for reasonableness and proportionality. BL estimated £783,670 (without contingencies) and the Defendants £944,239.50. Key disputes included expert fees (economic and industry experts) and solicitors' attendance costs. The Tribunal adjusted the budgets downward by 35% for most items, approving £340,750 for BL and £395,800 for the Defendants, with exceptions for BL's economic expert costs (included at full due to underestimation concerns).
- The Defendants argued that the Tribunal lacks the power to make a Costs Capping Order (CCO) under Rule 53(2)(m) of the Competition Appeal Tribunal Rules. They contended that costs capping is an exception to the general principle of cost recovery and that specific provisions like Rule 58(2)(b) (mandatory capping for FTP cases) and CPR r. 3.19 (costs capping in judicial review claims) are the only exceptions. The Tribunal rejected this submission, affirming its discretion under Rule 53(1) to manage costs and impose a CCO if necessary to ensure proceedings are just and at proportionate cost.
- BL argued the case had public interest implications, as it addressed resale price maintenance (RPM) affecting consumers. The Tribunal acknowledged the public interest aspect but emphasized the claim's primary private nature (seeking damages and injunctive relief for BL). It distinguished this from judicial review cases (e.g., Corner House principles) where public interest is central to CCO decisions. The Tribunal held that CPR r. 3.19 does not require public interest to justify a CCO.
- The Tribunal evaluated whether it should exercise its discretion to make a CCO under CPR r. 3.19. The three cumulative conditions required were: (a) it is in the interests of justice to do so, (b) a substantial risk of disproportionate costs, and (c) the risk cannot be controlled by case management or detailed assessment. The Tribunal concluded that the parties' costs budgets were broadly proportionate to the claim's value (minimum £3.5m, maximum £7.7m), and existing mechanisms (costs budgeting and Rule 104 assessments) adequately managed any risks, making a CCO unnecessary.
Holdings
- The Tribunal concluded that the Defendants' costs were not disproportionate to the issues in the case and that existing costs management mechanisms (budgeting and detailed assessment) adequately controlled any risk of excessive costs. The parties' costs budgets were approved with adjustments to economic and industry expert fees, and trial attendance costs.
- The Tribunal dismissed the Claimant's application for a Costs Capping Order (CCO) and affirmed its power to make a CCO under Rule 53(2)(m) and Rule 53(1) of the Competition Appeal Tribunal Rules 2015. The Tribunal emphasized that while it has discretion to manage costs, the conditions for a CCO under CPR r. 3.19(5) (interests of justice, substantial risk of disproportionate costs, and adequacy of other cost controls) were not satisfied in this case.
- The Tribunal rejected the Claimant's argument that the case had public interest implications warranting a CCO, noting that the claim was primarily for private commercial damages. It also dismissed the notion that the CCO regime should be used to address access to finance issues, reiterating that costs management through budgets and assessments is the primary tool.
Remedies
The Competition Appeal Tribunal unanimously dismissed Belle Lingerie Limited's application for a Costs Capping Order (CCO) and approved the costs budgets as scheduled. The ruling confirmed the Tribunal's decision not to impose a cap on the Defendants' recoverable costs, while allowing both parties to apply for future variations to their budgets under specified conditions.
Legal Principles
The Competition Appeal Tribunal upheld its discretion to manage costs under Rule 53(2)(m), emphasizing that costs capping orders (CCOs) are permissible when necessary to ensure proceedings are just and at proportionate cost. The Tribunal referenced CPR r. 3.19, which mandates CCOs in exceptional circumstances where there is a substantial risk of disproportionate costs, and concluded that costs budgeting and case management directions were sufficient to address risks in this case. The decision highlighted that CCOs are rare and require satisfaction of cumulative criteria, including the inability of detailed assessment of costs to control disproportionate expenditure.
Precedent Name
- R (Corner House Research) v Secretary of State for Trade and Industry
- Red and White Services Limited v Phil Anslow Limited
- Wright v Rowland
- Socrates Training Limited v The Law Society of England and Wales
- R (Plantagenet Alliance Limited) v Secretary of State for Justice
- Tidal Energy Ltd v Bank of Scotland PLC
- Kazakhstan Kagazy PLC & Ors v Zhunus
- Willis v MRJ Rundell & Associates Ltd and Grovecourt Ltd
- Black v Arriva North East Limited
- Meigh v Prinknash Abbey Trustees Registered
Cited Statute
- Competition Appeal Tribunal Rules 2015
- Competition Act 1998
- Civil Procedure Rules
- Criminal Justice and Courts Act 2015
Judge Name
- Bridget Lucas QC
- Professor John Cubbin
- Anna Walker CB
Passage Text
- We unanimously dismiss BL's application for a CCO and approve the costs budgets in the form scheduled to this Ruling.
- It does not follow that it is in the interests of justice that it should be heard on terms that the Defendants can recover no more than £50,000 even though it may have reasonably incurred more in successfully resisting what may be something of a test claim.
- We do not accept the Defendants' submission. We consider that the Tribunal is entitled to manage the costs of the proceedings before it and, if it considers it is necessary, to impose a CCO in order to do so. Nothing in Rule 53(2) or anywhere else in the Rules suggests it is not entitled to do so.