England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		7 Rolls Building Fetter Lane London EC4A 1NL
		16 December 2011

MR JUSTICE HILDYARD:

1. By an amended application notice dated 29 January 2011, the claimants seek permission to amend again their Re-Amended Particulars of Claim and Reply and an order that the issue of quantum of damages resulting from the alleged infringements of competition law be determined separately from the trial of the issues presently fixed to take place in the period 14 May 2012 to 31 July 2012.
2. Many of the proposed amendments comprise deletions which restrict the claimants' case. Subject to the issue of costs, these are not opposed by the defendants. Others, however, comprise additions. The claimants' present these as required to clarify their case; the defendants contend that they extend the claimants' case and introduce new claims and allegations that they cannot fairly and properly address in due time before the date set for trial. They oppose permission to introduce such amendments accordingly.
3. The defendants also oppose the application for a split trial. They contend that the parties have conducted their cases on the basis and spent time and money on the footing that liability and quantum would be tried together and that a split trial would increase costs without any sufficient justification. They contend that the reality is that the claimants' real reason for seeking a split trial now is not efficient case management, but to give themselves time and room in which to prepare their case on the quantum of a newly fashioned case they seek permission to put forward. There is thirdly, and this is something of an iceberg point, in that its shape above the water belies the size of the disparity between the parties' differing points of view, a dispute as to the ambit of disclosure. The defendants, put shortly, contend that the ambit of disclosure was agreed to be limited to the period before 23 December 2009 and that any extension will take a great deal of time. The claimants, on the other hand, now press for disclosure to the present day and continuing and say it may reasonable expeditiously and efficiently be given. This disclosure point naturally knits in with the defendants' objections to various of the proposed amendments which, by their nature, would require disclosure of documents relating to the period after December 2009.
4. Avoiding any cynical reflections, such as "of course", both parties have strenuously maintained before me that they wish to retain the trial dates fixed pursuant to the order of Lewison J made on 1 February 2011. The conundrum thus posited is a not unfamiliar one. The defendants say that, if that date (that is to say May next year) is to be saved, permission for the amendments sought must be refused. Further, they contend that that would be so whether or not a split trial is directed. On the other hand, the claimants maintain that there is no real conundrum and that, especially given the resources of the defendants and the size of their legal teams, there is time to accommodate the amendments and ancillary exercises, including further disclosure and expert evidence well in time. They add that the splitting of the trial would further assist this, as well as being inherently justified.
5. The position of the court is an invidious one. It is by no means easy or even possible to judge between these opposing contentions put forward by responsible and experienced leading counsel and their teams. Any judgment of mine is on the basis of an inevitably recent and relatively superficial view of the case, and what is involved in its preparation. The most that can be achieved to is to balance the risk of injustice as best one can. There is no perfect or risk-free solution.
6. The nature of this dispute more generally is clearly and helpfully set out in the judgment of Daniel Alexander QC (sitting as a Deputy High Court Judge in this Division) delivered at the end of July 2010 and determining in favour of the defendants their application for summary judgment in respect of what was then paragraph 55 of the Amended Particulars of Claim, which I understand comprised a freestanding claim which did not, as such, give rise to competition issues. I adopt the description there given and with gratitude simply set out paragraphs 3 to 5 of that judgment:

"3. Before turning to the claims in detail, it is necessary to outline the nature of the dispute. The First Claimant, "EWRG", is a company whose principal activity is the collection and recycling of waste materials, including gas discharge lamps. The Second Claimant, "CEF", is a wholesaler of electrical goods, including lamps. Since 2006, it has also produced lamps under the brand name "Edison". That it is a producer as well as a reseller of lamps, is one of the key facts underlying the claim.

4. The First to Fourth Defendants are manufacturers of lamps and, in the case of the Fourth Defendant, luminaires. They are referred to in the Particulars of Claim as the "big four" because, together, they hold the lion's share of the market for the sale of lamps in the United Kingdom. There is no need, for the purposes of this application, to distinguish between them. The Fifth Defendant, "Recolight", is a company which operates a producer's compliance scheme established pursuant to the Waste Electrical and Electronic Equipment Regulations 2006 (SI 3289) ("the Regulations"), which implements Directive 2002/96 EC of the European Parliament and of the Council of 27th January 2003 on Waste Electrical and Electronic Equipment, usually known as the "WEEE Directive" and to which I shall refer as the "Directive" in this judgment.

5. The claim, put shortly, is for a declaration that the arrangements whereby the First to Fourth Defendants charge the same fee to their customers as a recycling charge on the occasion of the sale of new lamps and pass the proceeds of that charge on to Recolight are contrary to Article 81 of the EC Treaty (or, since 1st December 2009, Article 101 TFEU), in that they prevent, restrict or distort competition. The claim is also for (i) an injunction requiring Recolight to treat EWRG fairly and in a non-discriminatory manner in the award of contracts for the recovery and recycling of waste lamps; (ii) an injunction requiring Recolight to accept and pay for the recovery and recycling of waste lamps regardless of their producer; and (iii) a restitutionary claim for repayment of certain sums paid by CEF as recycling charges on lamps and luminaires. In addition, there is a claim for a declaration that the First to Fourth Defendants are obliged to continue to make supplies of lamps available to CEF on normal trading terms and at normal prices, but without the requirement that CEF should pay any additional recycling charge referable to the Regulations."

7. There are thus presently two main heads of claim in the main proceedings. The first main head of claim advanced is a competition law plea under section 2 of the Competition Act 1998 and/or Article 101 of TFEU as follows: (a) by means of their arrangements with and/or carried out by means of Recolight (the fifth defendants) the first four defendants, who are rival major producers of new lamps have avoiding competing against each other on a significant element of their respective costs, namely compliance services; (b) the first four defendants have colluded with each other on the form and manner in which the recycling charge element of their costs will be passed to customers as part of their price for the supply of lamps; (c) this has led to higher lamp prices to consumers in the United Kingdom, including CEF (the second claimant) than would otherwise have arisen. I should pause there to point out that in my description of these heads of claim, taken from the skeleton argument of the claimants, the first has been labelled the "upstream claim"; and the Defendants contend that it was not part of the pleadings as they exist.
8. The second main head of claim is that Recolight, the fifth defendant, has abused its dominant position contrary to section 18 of the Competition Act 1998 and Article 102 TFEU by seeking to weaken and/or drive the first claimant out of business. The essence of this claim, as pleaded by the claimants is, first, that the fifth defendant exerts market power as a purchaser of lamp waste collection and treatment services. Its members account for the vast majority of all the relevant lamp waste that has to be collected. It is an indispensable trading partner for the first claimant and is dominant for the purposes of competition law. Secondly, that the fifth defendant has abused that dominance by adopting and maintaining a purchasing strategy since around May or June 2009, the aim or effect of which has been to deprive the first claimant of lamp collection and treatment business by various means.
9. I should perhaps add two further glosses. First, one of the amendments which is not opposed is the withdrawal of the claim for restitution which is described by Mr Daniel Alexander and its substitution by a claim for damages in what will inevitably be a lesser amount. The second is that, since Mr Daniel Alexander's judgment and pursuant to an order of Lewison J in February 2011, the main action has been consolidated with a second action. This second action has been brought by the fifth defendant against the first claimant and includes the counterclaim. The subject matter of that second action is that the fifth defendant leased lamp recycling containers from the first claimant in 2007 and the action concerns contested breaches by each side of that lease agreement. The first claimant also claims that the fifth defendant misappropriated its containers and their valuable waste contents. I note that this misappropriation is also proposed to be relied on in the main action as an example of abuse of dominance.
10. The claimants' application before me is supported by three witness statements of the solicitor with conduct of the proceedings on their behalf, a partner in the firm of Paul Dodds called Mr Dominic Martin Cassidy ("Mr Cassidy"). These are his sixth, seventh and eighth witness statements in the proceedings and are dated respectively, 29 November, 8 December and 12 December 2011. In opposition there are three witness statements of the solicitor with conduct of the matter on behalf of the defendants, Mr Richard McDonald Little ("Mr Little"). Mr Little is a partner in the defendants' solicitors, namely Eversheds LLP. His sixth and seventh witness statements are dated 7 December and 9 December respectively, and he has recently introduced a further witness statement, his eighth, dated 15 December 2011.
11. I have been ably and patiently assisted by counsel on both sides, namely, Mr John Turner QC and Messrs Charles Morgan and Robert O'Donoghue for the claimants and Mr Mark Hoskins QC and Miss Sara Cockerill QC for the defendants.
12. Mr Cassidy's sixth witness statement in the proceedings contains in paragraphs 3 to 17 a useful review of the chronology of the proceedings thus far and so far as presently anticipated in the future:

"3. Proceedings in Claim No. HC09C04852 were commenced by way of Claim Form issued on 23 December 2009, with Particulars of Claim attached and running to almost 40 pages. The main heads of claim were, broadly, (a) restitution; (b) breaches of competition law through the making and carrying out of a restrictive agreement; (c) breaches of competition law through an abuse of dominance.

4. A lengthy Defence (almost 50 pages) was served on 3 March 2010. The Reply was served on 13 April 2010. The Defendants' Rejoinder and Response to a Claimants' Request to Information were served on 14 July 2010.

5. By Order of Master Teverson the matter was set down for trial for a 15-day estimate in a window between 2 May 2011 and 29 July 2011, with a standard set of directions to trial (see DMC6/Exhibit 1, pages [1-5]).

6. Thereafter, the proceedings became increasingly heavy and complicated.

7. In May 2010 the Defendants sought to strike out and/or summary judgment in respect of one paragraph 'of the Particulars of Claim, which concerned a self-contained issue arising under the Waste Electrical and Electronic Equipment Regulations 2006 ("WEEE Regulations"), the main piece of environmental legislation in the case. Summary judgment was granted by order of Daniel Alexander QC sitting as a Deputy High Court judge on 29 July 2010 (see DMC6/Exhibit 1, pages [6-8]). By their Amended Particulars of Claim dated 4 August 2010, the Claimants made the amendments consequential upon the Order of Daniel Alexander QC, with the Amended Defence following on 12 August 2010.

8. The Claimants and the Defendants then made a series of applications for a number of further interim orders. Notably, the Claimants sought additional disclosure from the First to Fourth Defendants. The Defendants had initially only given disclosure for the period from 1 .March 2006 to 23 December 2009. By Application Notice dated 22 November 2010 the Claimants sought disclosure of documents for the period beginning in 2001. The Claimants also sought permission to make certain amendments to the Amended Particulars of Claim.

9. At around the same time the Defendants made various applications. Notably, these included requests for orders that the Claimants further particularise their Schedule of Loss. The Defendants sought further information by letter dated 23 November 2010, failing provision of which they reserved the right to bring a strike out claim in relation to several heads of loss. The Defendants then made an application for an order under CPR Part 18, and to "strike out" eight separate heads of loss.

10. All the various applications were listed for hearing in the week of 31 January 2011. The parties were able to reach a more or less final measure of agreement immediately prior to the hearing date. A proposed consent order was presented to Lewison J on the morning of the hearing. He approved the order, with a small number of his own amendments, and I attach a copy of the Order as made on 1 February 2011 as DMC6/Exhibit l; pages [9-75].

11. The Order sets out the various steps to trial. Among the more salient points for present purposes are as follows:

(a) The Claimants were to make any amendments to the Amended Particulars of Claim (including the Schedule of Loss) by 14 February 2011 with any consequential amendments to the Defendants' Defence served by 14 March 2011.

(b) The First to Fourth Defendants were required to give disclosure for the period starting from 1 January 2001, by 18 July 2011 (with inspection no later than 7 August 2011).

(c) The parties were to serve witness statements of fact on 23 December 2011, and expert reports on 10 February 2012.

(d) The trial date set down for summer 2011 in the Order of Master Teverson was vacated. It was replaced by a trial window between 14 May 2012 and 31 July 2012.

(e) The trial estimate was increased to 45 days.

12. The need to provide for a longer trial was raised by the Defendants in the Third Witness Statement of Richard Little (at paras 72-77), then with an estimate of eight weeks. This was on the basis that (a) the number of potential witnesses had increased to 40 (the Defendants envisaged calling up to 28 witnesses themselves); (b) large numbers of documents had been disclosed (over 30,000 electronic documents and 40 files of hard copy documents); and (c) the number of heads of loss claimed by the Claimants had increased.

13. In the period immediately prior to the hearing on 31 January 2011, there were discussions between counsel as to the directions to trial, including, I understand, the trial estimate. I was not directly a party to these discussions, although I was kept abreast. There was eventually consensus (or at least no open disagreement between the parties) that a nine-week trial estimate was sensible overall to deal with issues of liability and quantum.

14. Since January 2011, there have been a number of relevant further developments.

15. First, the Defendants have launched further requests for information and documents aimed at the Claimants' Schedule of Losses, including a very detailed 13-page request served on 20 June 2011: see DMC6/Exhibit 1, pages [76-92].

16. The Claimants' legal advisers have had to spend several hundred hours in total addressing these requests so far. More pertinently, it has become painfully clear in this process that the exercise is largely impracticable. The quantum issues are not only contingent on liability being established; they are also contingent on the precise extent to which, and the ways in which, liability might ultimately be established at trial. It is in many respects a whole separate area of inquiry from the liability issues.

17. The quantum issues also raise detailed and discrete questions of lost profits, for which the Claimants have very recently instructed a forensic accountant to assist them."

13. Also I should add, since it is of particular relevance to the request for a split trial, that there has been a series of court orders requiring proper particularisation of the claimants' quantum claims pursuant to which the claimants have served:

(a) a schedule of loss served on 15 September 1010;

(b) a revised schedule of loss served on 9 November 2010 with an additional column now to indicate which paragraphs of the Particulars of Claim each head of loss relates to; and

(c) an amended schedule of loss served on 4 March 2011.

14. The cost of these proceedings so far and anticipated have been and are forecast to be very considerable indeed, not to say eye-watering. Taking this from the defendants' skeleton argument, it would seem that the defendants have incurred around £5.5 million to date in costs. Even without the proposed re-re-amendments, it is estimated by them that their cost to trial may exceed £10 million. This in part reflects both the weight of the case and the volume of disclosure, or the iceberg point which I have identified. The claimants' costs are markedly less but not modest, so far over £2 million, as indicated by Mr Cassidy in his seventh witness statement. This difference in cost reflects the very considerable team deployed in Eversheds, according to Mr Cassidy some 47 legal personnel, as well as two QCs and five junior counsel. I note this also supports the claimants' contention that the defendants do indeed have plenty of manpower with which to address the work which is necessary to get this matter fit for trial.
15. Experts have been instructed on both sides and have been for some time, though I am not sure exactly for how long. I think I can safely assume that on both sides, they are well up to speed with the issues and will already have done preparatory work.
16. Against that background, I turn to the first substantive issue, which is whether the amendments now sought by the claimants should be permitted, notwithstanding the opposition of the defendants. In doing so, I am acutely aware that, as is so often the case, the issues are in the nature of a cat's cradle. The strings of the trial date, whether to split the trial, and a margin of appreciation for the time really necessary for a full and fair preparation are all connected, and a pull on one affects them all. It is necessary, however, to start somewhere and I do so with the present pleadings. These are inevitably complex, presently stretching in the case of the Re-Amended Particulars of Claim to some 50 pages, and in the case of the Re-Amended Defence to some 59 pages. There is a Reply and also a Rejoinder as well. If and to the extent that amendments are permitted, they will no doubt occasion amendments of all subsequent pleadings too. I will have something to say at the conclusion of the judgment as to whether the process of pleading has clarified or obfuscated the issues, and what the best thing to do would be in order to ensure that a trial, whenever it takes place, is as confined and defined as possible.
17. The amendments to the Particulars of Claim for which permission is now sought are in appearance quite extensive. The defendants contend they introduce a wholly new case. The claimants contend, as I have indicated above, that they are for the most part clarificatory. Rather than describe them at great length, I think it is sufficient and more helpful to attach to this judgment the draft setting out the proposed amendments in pink. My references to paragraph numbers below are, unless otherwise stated, to paragraphs in the draft Re-Re-Amended Particulars of Claim ("RRAPC") attached marked "A". The most important of the paragraphs in issue are paragraphs 74, 96, 97A, 104A, 105A, 105B, 114 and 119.
18. Before descending into the detail, perhaps the simplest way of explaining the overall gist of the amendments is to describe the objections to their introduction. Three principal objections are advanced. The first is that, as leading counsel for the defendants told me, and confirmed expressly on my questioning him further, the defendants have never, before receipt of the proposed re-re-amendments, understood the claimants' case to raise any self-standing competition issue in respect of the structure of the arrangements between the first four defendants, which are carried on through the fifth defendant. Their confirmed position is that they did not appreciate that the claimants' case as previously pleaded extended to claiming that such arrangements, and in particular the arrangements between the first four defendants, to become and remain members of the fifth defendant, are uncompetitive and unlawful as being contrary to Article 101 TFEU. They contend further that, if such a claim (as to which see especially paragraph 61 of the RRAPC) is permitted to be introduced, the defendants would wish to rely for their part on the exemptions from the restrictions in Article 101 TFEU which are provided for by Article 101(3). The burden would be upon them to establish that such exemptions apply, and the exercise would, they say, involve investigation and consideration of a wide range of factual and expert economic issues which have not been raised in the proceedings to date. Counsel referred in this regard to the Commission's guidelines on the application of Article 81(3) of the Treaty, to illustrate the sort of far-reaching and detailed analysis and evidence that would be required.
19. The Defendants contrasted what they presented as this new claim, which they labelled the "upstream claim", with what they presented as the existing downstream claims. These have as their focus the arrangements for the first four defendants to pass on to consumers, penny for penny as I understand it, the recycling charge which they are charged by the fifth defendant, which they own, to cover its operating expenses in collecting and recycling electronic and electrical waste, and in particular discharge lamps. This is in order to comply with the Waste Electrical and Electronic Equipment Regulations 2006, which implement the Waste Electrical and Electronic Equipment Directive. These downstream claims do not require any reference to or reliance on Article 101(3).
20. The second raft of objections is as to what again are described by the defendants as new claims or allegations in support of what they accept is an existing claim by the claimants that the fifth defendant has a dominant position and is abusing it contrary to Article 102 TFEU and the Competition Act. More particularly, the defendants contend that the proposed new paragraph 74(3)(i) of the draft RRAPC introduces a new claim or allegation that the fifth defendant has abused its dominant position by "adopting and maintaining an overall purchasing strategy since around May or June 2009, the aim of which is to deprive the first claimant of lamp collection and treatment business by various means". They also describe as new factual allegations or particulars intended to be put forward by the claimants in support of this claim.
21. The basis of the defendants' objections to permission being given to these other new allegations is rather different than their objection to the introduction of what they depict as the new upstream claim which I addressed first. I do not understand the defendants to contend, or at least to put in the forefront in this case, that these proposed amendments would cause them to have to run a new defence requiring detailed and factual and expert analysis. Rather, at the forefront of their objection in this second category of proposed amendments, is that they call for and would require a new disclosure exercise focused, as is inherent in the nature of the proposed amended pleas, on the period since May or June 2009 and continuing.
22. This point, which I have referred to earlier as something of an iceberg point, has been the focus of much dispute. Suffice it for the present to say that the defendants' estimate as to how long this would all take, first estimated until July 2012, and has now increased inexorably towards 2013 as the hearing has progressed. On any view, the defendants say, the exercise would make a fair trial in May 2012 quite impossible. The claimants disagree.
23. I think I can, without doing too much damage to the more sophisticated categories advanced before me, lump into a third general category of objection a group of proposed amendments which are said to introduce new factual averment that will require an analysis and also extended disclosure past December 2009. Within this third group are the following. First, allegations as to the object and motivation of the fifth defendant to marginalise and grind down the first claimant. Second, allegations said to recast or re-clothe claims in respect of which, in their original form, Mr Daniel Alexander QC granted summary judgment. Third, allegations that all the abusive conduct of the fifth defendant, was the product and result of an unlawful agreement between the first four defendants.
24. These are all objected to on slightly more amorphous grounds as being (a) new, (b) too late, (c) requiring additional, inappropriate and disproportionate disclosure. I turn to discuss, as briefly as I feel able, each of the three categories of objection, now taking into account the claimants' response to these objections.
25. As to the first category and the defendants' objection that the case has hitherto been restricted to the downstream allegations with respect to the pass through of the recycling charge to consumers and is now sought to move upstream to the lawfulness of the structure that the fifth defendant represents, the claimants' response is simple; it is that the case is not new at all and that the defendants and their advisers cannot reasonably have thought it was not advanced, albeit with less clarity previously.
26. Leading counsel for the claimants suggested at one moment in his oral submissions that the defendants actually knew that the upstream claim was intended to be advanced, but this was and remains a difficult line to pursue in light of the express confirmation by leading counsel for the defendants to which I have already referred, to the effect that this was not their perception or understanding. It would involve me, if I were to pursue this line, having to make a decision as to whether the court was being intentionally misled. Mr Turner stepped back from this and I think he was right to do so. That being so, the question of what the defendant should have understood is relevant to whether permission should be granted when that question is, as it were, addressed in a vacuum; but the claimants want not only amendment, but, and they do this strenuously, they want to preserve the existing trial date. The practical point really in issue is whether the existing trial date is sensibly feasible if the amendments are permitted.
27. As to the first part, whether, objectively tested, the proposed amendments do introduce a new upstream claim, I must admit that my mind has wavered according to the speaker. Both leading counsel have been persuasive in the course of their submissions, and the issue to my mind does look different through their two different lenses. The fact that both perceptions may be justified in a sense tells its own story. However, in the end, and assisted by some other considerations, I have concluded, so far as necessary or relevant for me to do so at all, that at least the shape or spectre or the upstream claims is discernible in the pleadings as they stand and the more so to a reader alert to the risk of a broader interpretation rather than a reader intent on strict construction and limiting the claims against him.
28. That conclusion is based on a reading of the existing pleading as a whole, but in particular I consider that an objective and indeed unstrained or natural meaning of paragraph 68 of the existing pleading, sufficiently connotes for these purposes, even if it may not clearly adumbrate, an upstream claim. In that particular context, Mr Hoskins QC sought to persuade me that the reference which is important at the end of the relevant paragraph to their being a " uncompetitive joint venture" between the defendants, does not connote a claim, and was not read as connoting a claim, that the arrangements between them achieved through membership of the fifth defendant, were and are uncompetitive. He said this relying on the fact that the expression "joint venture" seems to be a term of art in the European competition context, having in that context especially limited meaning. He referred me in this regard to Bellamy and Childs European Community Law of Competition (6^th Ed) paragraph 7.002, where it is stated:

"The term 'joint venture' … as used by industry, resists clear definition. [Joint ventures] range from arrangements which are akin to mergers through to mere cooperation agreements for research and development, production or distribution (although many [joint ventures] do not contain all of these features). Terms such as joint venture, strategic alliance, cooperative arrangements are loosely applied to commercial agreements between two or more parties with a wide variety of objectives and economic effects. However, in the context of the EC competition rules, the Commission has applied the term 'joint venture' only to an undertaking that is (i) a separate business entity, and (ii) jointly controlled by at least two parents."

29. The question raised then is whether, in the particular context of the pleading, the expression was intended to be used for such a limited meaning or whether it was deployed with the intent of it carrying a more general meaning that it usually does in other commercial contexts. I take into account that of course this is a competition case and that one should expect and usually give effect to the vocabulary of competition law. But in context, I have concluded that the broader meaning was intended and is discernible, or at least that it was a risk which a request for further particulars would have clarified.
30. As I have said, I reach my view not only on the basis of that particular point, but it does fortify my more general conclusion that, looked at objectively, the correct lens in this particular context, is that provided by the claimants. My conclusion in that respect is consistent with, and to my mind supported by, various factors outside the four walls of the pleading to which my attention was specifically drawn by Mr Turner. The first is that in June 2011 the parties prepared a travelling draft list of issues to be covered by expert economic evidence which though, as Mr Hoskins has contended was not clear, does seem to identify as one such issue "objective justification in relation to Article 101 TFEU, including any consumer benefits and/or efficiency gains resulting from the practices". This, as it seems to me, is likely to be a reference to the Article 101/101(3) point. I should perhaps add, secondly, that my conclusion may also be supported by the minutes handed up to me of a meeting with the OFT and which may also suggest at least some focus on the part of the defendants on the upstream lawfulness of the structure and that there might be an issue in this regard. I do not place much weight on this in this context, although it had more relevance in the context of assessing how long a time it should reasonably take the defendants to prepare a case on Article 101(3) exemption.
31. The corollary of the view I have taken is that I consider it would be unfair to the claimants to refuse permission to clarify their upstream case. The objections to permission based on the case being a new one, and the objection which was also advanced that the real reason for the changes is that the claimants have recently changed leading counsel, which was not itself a sufficient basis for adjourning a trial, are not established. Obviously the other side of the coin of that conclusion is that it might then be argued by the claimants that, since the defendants should have appreciated that there was an upstream claim, they have only themselves to blame in not preparing for it. But to my mind that is not established either, and I do not consider it would be fair or proportionate to deprive the defendants of such time as they strictly and reasonably need to establish their case for exemption under Article 101(3). This, to my mind, almost inevitably has repercussions in terms of the practical trial date. I shall return to that after more briefly stating my view with respect to the other two categories of proposed amendments.
32. The second category of objections has, as its basic issue, the question of extended disclosure and in particular the need, if this raft of amendments is permitted, for disclosure for the period after December 2009 (the iceberg point as I have labelled it). As previously indicated, this is intertwined with the question whether, first, the claimants agreed that the scope of discovery be temporarily limited, and secondly, if so, whether they are stuck with that; and if so, whether the amendments that rely on the limitation being swept away should be disallowed on that footing.
33. The claimants say there was no such agreement and certainly none such as for all purposes to restrict disclosure. They emphasise in this context three principal points. First, they point out that the existing pleading uses the present tense in various of its allegations, connoting continuing breaches of competition law (paragraph 98 is an example) and also in parts already making allegations in respect of the period post 2009 (paragraph 115 is an example). That seems to me to be so, but it casts an odd light on the accepted fact that disclosure has so far been temporally limited. Second, they point out that any acceptance of a temporal limitation was really in order to avoid a disproportionate trawl through correspondence and documentation that the defendants' solicitors assessed was likely to be largely comprised of privileged material. In this context I was handed a letter dated 3 September 2010 from the defendants' solicitors, Eversheds, to Paul Dodds, which includes the following statement. Under the heading "End Date":

"Our clients' position remains that the appropriate end date is 23 December 2009, being the date when your clients' claim was issued. We re-stated our previous justifications for proposing this date which are essentially that, to the extent that there is any relevant correspondence between the Defendants after this date, any correspondence would fall within the remit of legal privilege and would not, in any event, be disclosable. Searching for correspondence which may not be subject to privilege would be entirely disproportionate.

You confirmed that you will consider our position further and provide us with your views at the start of next week."

34. The difficulty in this context is that the claimants did not reply to that nor, apparently, did they demur from the temporal time limit there suggested.
35. Third, it seems that the fifth defendant now intends itself to break through any temporal limitation and provide specific disclosure in respect of matters since December 2009. This last of the claimants' points does seem to me of some force, in this and other contexts, and especially the question of how long the defendants need time to take a more extensive disclosure exercise.
36. I must admit to some surprise, in light especially of their pleadings, that the claimants appear to have gone along with the temporal limitation thus far. However, after anxious thought, I do not think it would be justified or fair to elevate that into a binding agreement preventing, or estopping or otherwise precluding them from requiring the ordinary entitlement to disclosure now that its need is clearer and the perception of that need is shared to some extent at least by at least one of the defendants. It follows that I do not consider that there is a self-imposed bar to disclosure and thus to amendments requiring it as the defendants have urged. The question then is whether the fact that further disclosure is required is nevertheless a reason for refusing permission.
37. In this context I bear in mind particularly the authorities cited to remind me of the proper approach that the court should take in deciding whether to give such permission. These are quite familiar, and I need not dwell on them. They are outlined in the White Book at 17.3.5 and they are shortly described in the claimants' skeleton as follows:

"… the key proposition is that, in view of the principles of justice and fairness and the overriding objective, amendments in general ought to be allowed so that the real dispute between the parties can be adjudicated upon provided that any prejudice to any party caused by the amendment can be compensated for in costs, and the public interests in the administration of justice is not harmed."

The claimants' skeleton then continues:

"These principles have been recently applied in the case of Beresovsky v Abramovich … applying Swain-Mason v Mills & Reeves. These make clear additionally:

a) the Court's discretion to permit an amendment is a 'broad' one…

b) in determining whether to exercise its discretion, the Court must have regard to all the circumstances and the overriding objective, and strike a balance between the interests of the parties…

c) in the case of a 'very late amendment', a 'heavy onus lies' on the party seeking to amend are justified…"

But it is then noted that Gloster J held in the Beresovsky case that "an application to amend brought six months prior to the start of a long 3 month trial, was not an application brought at a 'very late stage'."

38. As regards, of course, that latter point, everything really depends on the context. What is really in issue is whether prejudice will be caused, such as to dislodge the rebuttable presumption that in the ordinary course, parties ought to be allowed to amend their pleadings in order that the trial should be properly focused.
39. The defendants' skeleton argument introduced the further rider that given the direction of the procedure rules now in the CPR and the allowance that they make for the interests of other litigants, an application to amend should not be allowed if to do so would offend the overriding objective. The defendants therefore urge in this application that I should take account of all relevant circumstances, including prejudice to the defendants. Prejudice would be caused to the defendants as they maintain it. They indicated especially that the re-re-amendments would place a significant additional burden on them, particularly in respect of further disclosure and witness interviews.
40. It comes down, in the end, as most of these case management issues do, to a balance of prejudice. The balance I propose to strike in this case is to permit these amendments with the concomitant consequence of further disclosure and a delay to the practical trial date. Having concluded that there was no binding agreement, I do not consider that the claimants should be shut out of the newer claims on the ground that the disclosure train has left and the trial is nigh. In my judgment, in this case there is not sufficient to displace what I accept is the general, though displaceable presumption, in favour of permitting amendments before trial, to enable the parties to define and confine their case properly and fairly prior to such trial.
41. In light of that conclusion, I propose to address the third category of amendments and objections to them very quickly. I do not consider that a sufficient basis for displacing that presumption in the context of those proposed amendments. It is not suggested that they do not make sense and I think they should be permitted, subject to one caveat in respect of the amendments to paragraph 105A and, of course, subject also to the question of costs. The caveat that I should record here is that one of the contentions of the defendants is that paragraph 105A, (which is an allegation in respect of the fifth defendant's obligations under the WEEE Regulations, that Recolight is obliged to purchase evidence generated in relation to WEEE Treaty by the first claimant of its own volition and not with the fifth defendant's prior request or approval) is merely a recasting of the issue originally raised at paragraph 55 in the Particulars of Claim in respect of which Daniel Alexander QC has already granted summary judgment to the defendants. I canvassed this with counsel, who both agreed that this issue, that is to say whether that claim as introduced now, is or is not another way of reintroducing the claim that was rejected by Mr Daniel Alexander, any argument would have to take place on another date. Nothing I say is intended to preclude such an application and such a hearing on that matter.
42. I turn to the question of how and when all this is to be done and how long a delay in the trial date is required. I do so with diffidence, since they involve an appreciation or guesstimate of how much work is really necessary and what timescale is really appropriate and required in a field which is not my usual stamping ground. Even if it were, the exercise called for is not a scientific analysis, but a more artistic impression. It would, I think, be somewhat presumptuous to gainsay with certainty the considered estimates of those whose acquaintance with the case is so much more profound.
43. The main points to address are the obvious ones. First, the disclosure exercise, second the witness statements that will be required and third, the expert evidence. There is perhaps, not unusually, a wide divergence between the parties as to what truly will be entailed.
44. However, taking first the question of the time needed for the further disclosure exercise, the gap between the parties is more than usually great, and I regret to note that my efforts to encourage discussion with a view to narrowing that gap appear to have had the opposite effect. In his sixth witness statement, made as recently as 7 December, Mr Little on behalf of the defendants said this at paragraph 63.3:

"63.3.1 Identifying the areas of dispute between the parties on the new allegations following the close of pleadings;

63.3.2 Considering with each of the five Defendants who the custodians are who are likely to hold electronic and or hard copy documentation in relation to the proposed amendments;

63.3.3 Discussing with the Claimants, which may perhaps take a month, the scope of e-disclosure as regards the number and identity of custodians and the key words to be applied to any search. Time should be allowed for either party to apply to Court for directions on the scope of the e-disclosure search should it not be possible to agree this;

63.3.4 Engaging the services of KPMG to harvest the potentially relevant files from the electronic equipment on which they are stored and to carry out a de-duplication exercise in relation to these documents;

63.3.5 Conducting a first and second line review of all of the electronic documents harvested by KPMG to identify those that fall within standard disclosure, or within the scope of disclosure agreed between the parties;

63.3.6 Collating any hard copy documents Defendants which are potentially amendments; in the control of the five relevant to the proposed

63.3.7 Reviewing the hardcopy documents to identify those that fall within standard disclosure, or within the scope of disclosure agreed between the parties;

63.3.8 Considering with and taking instructions from the five Defendants in relation to which documents should be included within the Confidentiality Ring;

63.3.9 Liaising with each of the five Defendants in relation to signing their disclosure statements;

63.3.10 Arranging for the Claimants' solicitors to have access to the electronic documents; and

63.3.11 Arranging for copies of the hard copy documents to be provided for inspection by the Claimants' solicitors."

Also 63.4 states:

"I estimate that a realistic time frame by which this process could be completed is the end of July 2012."

45. My apparently counter-productive intervention has now prompted a further witness statement, Mr Little's eighth, dated 15 December, which I have already had occasion to mention briefly. The effect of that new evidence has, I think, reasonably accurately been summarised in a written summary prepared by counsel for the claimants, also encouraged by my intervention. I quote from paragraph 13 on page 4 of that summary. They make the point that in his eighth witness statement:

"… Mr Little appears to have increased substantially his estimate for doing the work that he thought could be completed by the end of July 2012. He now estimates that, including all five defendants in the exercise will generate some 1.08 million reviewable items. Secondly that, based on his estimated review rates, it would take a team of 20 reviewers 13½ months to conduct the first review. Thirdly, this would suggest that using a team of 20 reviewers, the disclosure process could not be completed before January 2013." [Quote unchecked]

46. In the same note to me, counsel for the claimants then sets about undermining or seeking to dislodge the factual premises and guesstimations which lie behind Mr Little's present estimates.
47. The claimants then go on, not only to question the assessments, but to suggest a rather more streamlined approach, all pointing to their desired conclusion that, if the trial is to be moved at all, it should certainly not be moved beyond early Michaelmas Term 2012. In that context I should note that the claimants' note to me commences with an expression of dismay, that we should be contemplating a start date for the trial being delayed to 2013 simply because of (a) a disclosure exercise relating to only a two year period, that is to say 2010/2011; (b) the allegations in question that are entirely already present on the pleadings and relatively limited; and (c) where the allegations revolve around the actions taken by a single organisation in the form of the fifth defendant in relation to the first claimant in that period; and (d) when Mr Little has already stated that the witness statements that Eversheds were preparing to serve on 23 December this year would be accompanied by voluntary further disclosure.
48. The gist of the approach advocated by the claimants in their note may be, I think, summarised as follows. First of all, they say that, if necessary, they will agree to a limitation on standard disclosure in the years 2010 and 2011 from the fifth defendant. They say that this should significantly reduce the scope of the exercise and the time needed to complete it. By way of support for their estimate that that should very much limit the time required, they draw attention to the fact that disclosure given for the first four defendants covering a period of over five years from 2001 to 2006, was undertaken within the period of 2½ months after Newey J had ordered e-disclosure by his order of 18 July 2011. They note also that even limiting that process of e-disclosure to the top 20 per cent of relevancy hits, ultimately yielded 36 lever arch files, indicating the extensive scope of the exercise undertaken successfully in that time period.
49. Secondly, they indicate ways of cutting down the time limit for each step. I can summarise that as follows. The steps are first, identifying the areas of dispute, second, identifying the custodians and thirdly, agreeing the key words. The long and the short of it is that the claimants consider, in their estimation, that those steps could be radically reduced from terms of weeks to days thereby accelerating the process.
50. Thirdly, a point has been raised which may further delay the process of disclosure: this is the need for confidentiality and for confidential assessment by each of the defendants. The claimants in that regard suggest as a practical solution that disclosure and inspection should take place within a confidentiality ring, and proceed without delay whilst the relevant clients are reviewing their own position on confidentiality. The claimants in this context also make the overarching point that the defendants have a very large legal team. I have already referred to the size of this previously, and I recognise, of course, that it is a mighty army. I also recognise that, however mighty the army, in the end various parts of the process call for work assessment and verified evidence by a single person in the shape of an expert and in each case, by the various deponents in witness statements who, of course, must face the burden of cross-examination in the end. The third risk is one of under-estimation, that is to say of me, from the position I sit, safe in the fact that I will not have myself to be involved in the work, simply under-estimating exactly what is involved.
51. My overall impression is that it should be possible to undertake the disclosure exercise in time for a trial commencing late in October 2012. But this is subject to a consideration of further stresses which will be involved in the preparation of the case. In this regard I bear particularly in mind the obvious need for far-reaching expert evidence in the context of the case for exemption which the defendants have notified me they will inevitably have to introduce, and which they have described as a notoriously laborious process.
52. I have also mentioned, but do so again, the Commission's guidance in this regard, which makes clear that a very broad assessment of the market and an economic analysis will be required in that context. This does seem to me also a matter which, although one can expect the firm of experts or the expert whose firm is instructed to have a large body of support, is a matter which will, in order for it to be reliably put forward to the court, require to be verified by the expert himself and which may very well, in the nature of things, take some considerable amount of time.
53. Perceiving my concern in this regard, the claimants' counsel put forward various points to dissuade me from my initial inclination that this really was something which needed time to bed down. His first point was this: that the Commission's guidance to which I referred show in general, and in unspecific terms, the conditions that have to be satisfied, but he noted that the defendants had not put forward details as to the factors that they would perceive they would need to rely on in the particular circumstances of the case in hand. He did not say so, but I took this to be an indication that I should discount some of the weight of the exercise which was envisaged.
54. His second point was this (and this did weigh with me) that the defendants' experts and the defendants themselves, should not be starting from a standing start. In this regard, the point that was made was that the defendants must already be familiar with the arrangements that they have made, and must have investigated the competition issues arising in implementing them through the fifth defendant, at least for the purpose of discussing them with the OFT, as I have indicated they have. The claimants urged that I could safely assume that the economists and experts to be instructed in the matter must have already been looking at the effect on the arrangements within the market and therefore would start, as it were, 30 love up.
55. The third point which flows from that is that, in the nature of things, the defendants must have been taking into consideration and addressing the efficiency gains and consumer benefits in case their arrangements were ever questioned and that they must have been doing so for years. The fourth is simply a point which reflects a point already made, but which was supported by my being handed up a note of a meeting between the defendants and the competition authorities to discuss the potential availability of defences in respect of any query.
56. All these points have weighed with me and I must say that I consider it to be difficult to assess how long is truly needed to ensure proper preparation for trial. At the end, I have felt that a trial in October, particularly at the end of October, was probably doable, but I did not have sufficient evidence to persuade me that it was doable in a way which would permit the parties to be sure that their respective cases had bedded down and were in a state that could, with all proper fairness and efficiency, be undertaken at trial. It is notorious that, although time estimates assessed a year before the event can seem easily achievable and the prospect of further wastage of time discounted, when it comes to it, the time taken is usually greater than expected, and there is always the danger that in the rush to achieve an early trial date, the efficiencies which would have accrued had a little bit more time been taken will be lost.
57. In those circumstances, therefore, and again although I have found this a difficult decision, especially given the submissions which I invited to be made immediately prior to giving this judgment as to what additional prejudice might be caused by a delay from, say, October 2012 to, say, the beginning of January 2013, I have concluded that the safer course, and the best balance of prejudice, is to delay this matter until January. I have taken account of the fact that prospectively there may be additional losses which may be very damaging to the first claimant. But I have balanced against that the fact that a final resolution is some way off in any event. For example, in order to calibrate those losses, there would have to be an assessment of quantum which an early trial could not include; and in order to stop the strains which are said to arise in light of what are regarded as the unfair competition practices inherent in the structure, there would have to be a decision, first of all, by a trial judge immediately upon conclusion of a very long trial; and even then there would be a real prospect of a stay in the event of any appeal, which cannot be an unlikely possibility given the importance of the matter to the parties and the weight of resources which have been so far expended on the whole process.
58. Put shortly, my anxiety has been lest for the sake of two months, I direct, and ask special acceleration for, a trial into October or November, which then proves unsustainable in matters as they unfold. I think that the safer course is, if it is possible to do so under the listing arrangements, to obtain a trial date commencing immediately on the first day, if possible, or soon thereafter as possible, of the Hilary Term of 2013.
59. After inquiries I have indicated, though I cannot bind the listing officers and it will be a matter to be checked and confirmed through the usual channels, that a trial date will be made available in light of (a) the expedition previously accorded to this case; (b) the importance of the matter to the parties; (c) having regard to the continuing erosion of the financial position of the first claimant, which is accelerating, and (d) the fact that there is a public interest if there be a breach of competition law which is resulting in additional cost to consumers, that that matter should be adjudicated just as soon as possible. Having regard to those factors, I am confident, though not sure, that a trial date will be made available in January 2013. I would regard that as being a date which no-one can reasonably object to in terms of the matter being made ready for trial, though I regret that the claimants will inevitably be a little disappointed, not to say discomforted, that the matter should have been adjourned for, effectively, six months.
60. To summarise: on the matters which I regard as the first two important matters, that is to say whether the amendments should be allowed and, having regard to that, whether the trial should take place, I have decided that the amendments should be permitted, that the trial date in July is simply not achievable and would result in a harum scarum to no good effect, that the real choice is between October/November and January and that the safer course, and the one I intend to follow, with the help of the listing, is to start in January.
61. That brings me to the question of whether that trial in January should be confined to liability or whether it should extend also to quantum. In this regard the status quo, or the present way in which the parties have conducted the proceedings thus far, is that there has been no split between quantum and liability. Indeed, as I have indicated or foreshadowed, the claimants have, pursuant to order of the court, provided at least two schedules identifying with precision down in one case to a pound, what their loss would be. It is only recently and coincidentally with, though not necessarily because of, a different view taken by new leading counsel who has been instructed, that the schedules have, as it were, gone backwards (I do not mean that pejoratively) but in terms of their definition have become less precise, to the extent that it is now the claimants' position that they would not be able properly and fairly to put forward quantum calculations, at least for a July trial; and indeed I have a sense they would find it hard work to do so before January. In any event they say, it is a position which is taken in justification of split trials almost in every case, that a split is here justified and appropriate because it would reduce costs for the simple reason that the quantum investigation would be restricted to the permutations as found at trial, rather than the permutations which might possibly be found if the exercise is undertaken now.
62. With regret and with apology to the parties, I have to say that this is a matter which I do not think I should decide now. I wish to defer this to a further occasion, or at least a further written judgment, once I have more clearly identified precisely what the split would entail. I say this because, although the question of whether to split or not is, in a sense, a matter of broad assessment, there is one area where a split is capable of reasonably scientific definition and that is in the area of precisely what issues are to be allocated to liability and what issues are to be allocated in quantum. Perhaps unfairly I have the sense that this is still a matter of some uncertainty and, in my view, it would be useful to wait that which I am promised on behalf of the defendants will be available by 23 December, which is their definition, having consulted their own experts, of exactly what the issues are, so that the parties can then together combine to determine what would be split and what would not, and naturally I ask and expect the parties to use all best endeavours to seek to agree these matters, which should, in my view, be capable of agreement.
63. I would ask that those two matters, that is to say the identification of the defendants of the issues involved, and a recitation, as I hope it will be, of an agreement as to what a sensible split, even if not a desired one, would be in terms of the issues' allocation, be lodged with me; whereupon I shall do my very best, either simply to provide a written judgment or, if I need further explanation and assistance, to have a short further hearing which can be undertaken with a more skeletal attendance perhaps, some time very early in the new term.
64. I do that with reluctance, but nevertheless in the knowledge that this should not hold up trial preparation and that there is more time for a considered view in the light of the conclusion that I have reached as to when the trial should now take place.
65. I propose that also on that occasion, if not before (and I will have submissions from counsel shortly as to whether this is a matter which should be dealt with now), I will also be able, if there is a need for an oral hearing to consider the question of the disposition of costs and in particular, the defendants' suggestion that the withdrawn claim should be treated as discontinued claims with the result, so it is alleged, that the costs of and occasioned by such discontinuance should be paid by the claimants in any event.
66. As I say, it is with regret (since it defers the decision) that I do not place my head above the parapet any further than that in that regard. But I do attach a very considerable importance in this case, where I think the balance between a split trial and a non-split trial is fairly keen, to identifying precisely what issues would be proposed to be allocated to each part of a split trial; and I believe that is a matter on which I would benefit from more detailed assistance.
67. I would add, as a postscript (but as I had intended to do originally) that I do have a more general concern that the issues in this case may have become obfuscated rather than elucidated by the now considerably re-amended pleadings. As I indicated in the course of the hearing, I consider it necessary for there to be identified and agreed a definitive list of issues, to provide a sure and undisputed guide and check-list to what is required to be addressed and adjudicated at Trial. It will also provide a record against which to test any future proposed amendments.
68. This, amongst other matters, can be dealt with at a CMC after my decision on the split trial.
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ATTACHMENT

A. Re-Re-Amended Particulars of Claim

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