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Cleary Gottlieb Steen & Hamilton and Freshfields have secured major victories for Amazon and Apple respectively after the Competition Appeal Tribunal (CAT) refused certification in proposed consumer litigation against them.
In the first judgment to refuse certification outright and deny it on suitability grounds, the CAT said the potential class representative (PCR), Professor Christine Riefa, should not be authorised to pursue the claim due to concerns she had not demonstrated “sufficient independence or robustness to act fairly and adequately in the interests of the class”.
The claim arose following alleged breaches of competition law concerning the sale of Apple products on Amazon’s UK website.
In two separate hearings, Amazon and Apple challenged Riefa’s suitability to represent class members as the sole director of the company set up to represent them.
The tribunal, which was chaired by Mrs Justice Kelyn Bacon, expressed concern about her ability to advocate for the interests of the class, separately from those of the litigation funders, Asertis, and her solicitors, Hausfeld.
Following an initial certification hearing, the CAT directed a further hearing at which Riefa was cross-examined, marking the first time a PCR had been cross-examined at the certification stage.
In its judgment, the CAT indicated that Riefa relied heavily on advice from Hausfeld and perceived she was perhaps deferential to the funder’s interests rather than the class itself, implying that challenge was necessary.
While Riefa was alive to the funder’s interests, it wrote, it said she did not “appear to have considered sufficiently where the interests of the class members lie”.
Riefa had agreed to Asertis’s request to keep the funding terms confidential from the class members she was representing.
She also consented to any payments from the damages first being made to Asertis and Hausfeld instead of the class members, leading the CAT to note that she “did not appear to have given thought to the point that making an application for the funder to be paid in priority would also benefit Hausfeld”.
The CAT said its “overall impression was that [Riefa] did not understand” the agreement, adding: “Our key concern, in this case, is that Professor Riefa has not demonstrated sufficient independence or robustness to act fairly and adequately in the interests of the class.”
The tribunal invoked a high standard for future cases: “A class representative is not, and cannot be, merely a figurehead for a set of proceedings being conducted by their legal representatives but must act as the independent advocate for the class. Someone who chooses to act as a class representative, therefore, carries a heavy responsibility to ensure that the proceedings are conducted, in all respects, in the best interests of the class.”
It refused Riefa the opportunity to reformulate the certification application and seek fresh approval, rejecting the claim outright.
The ruling has effectively tightened the UK’s class action regime further following last December’s Le Patourel ruling, which saw BT successfully defend a £1.3bn class action suit, and the ongoing impact of the Supreme Court’s 2023 PACCAR ruling, which threw many funding agreements into doubt by classifying them as damages-based agreements
A Hausfeld spokesperson said: “Yesterday’s CPO ruling is disappointing, and we are carefully reviewing the tribunal’s reasoning and reserve further comment as we examine our options, but what is worth noting is that this judgment does not criticise the substance of the case against Apple and Amazon.”
Commenting on LinkedIn, Jeremy Marshall of litigation funders Winward said: “As a funder, there is an ever-present concern that the CAT is an expensive and uncertain tribunal,” adding that the certification failure could lead to a substantial adverse costs bill and possible related proceedings with ATE insurers.
Becket McGrath, a partner at Euclid Law, welcomed the decision. “If we are going to have a collective proceedings regime, in which there are significant financial incentives to find and fund claims against defendants with deep pockets, there have to be sufficient safeguards in place to ensure that successful claims lead to class members being appropriately compensated,” he said.
Blackstone Chambers’ Tom de la Mare KC, Jamie Carpenter KC of Hailsham Chambers and David Went of Exchange Chambers, instructed by Scott Campbell of Hausfeld, appeared on behalf of the proposed claimant.
Cleary Gottlieb’s team was led by partners Paul Stuart and James Norris-Jones instructing Meredith Pickford KC and David Gregory of Monckton Chambers as advocates.
Roger Mallalieu KC of 4 New Square and Lucinda Cunningham of Matrix Chambers and Sarah Abram KC, Tom Pascoe and Michael Quayle of Brick Court represented Apple, as instructed by a Freshfields team led by partners Bea Tormey, head of antitrust litigation in London, and Simon Orton, who co-heads its financial institutions group.
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