Legal Business Blogs

CAT orders Law Society to pay up to £230,000 costs in abuse of dominance case while first opt-out consumer damages class action fails

The Competition Appeal Tribunal (CAT) has hit the Law Society with a costs order of up to £230,000 to pay an online training provider after finding it breached competition law in a ruling published this week, while the first CAT opt-out consumer class action was withdrawn. 

In a judgment in May, the CAT ruled that, by requiring law firms to buy anti-money laundering (AML) and mortgage fraud training from it rather than others as a condition of maintaining their Conveyancing Quality Scheme Accreditation (CQS), the Law Society had abused its dominant position in the legal training market.

The claimant, Socrates Training, which provides online AML training packages, alleged that the Law Society’s actions were anticompetitive and sought an injunction as well as damages and costs. Its approved costs budget was £230,000.

The CAT ruled that the Law Society must now pay Socrates’ costs and damages. Socrates sought £112,500 damages in its claim form. The quantum of damages, however, will be determined at a later hearing.

Socrates has until 1 September 2017 to come to agree quantum, while a further case management conference will also take place in the interim to consider directions on the quantum proceedings. The date has yet to be fixed.

The Law Society was represented by Norton Rose Fulbright. Socrates Training was represented by Bernard George.  

In a separate set of CAT antitrust proceedings, the first opt-out consumer class action in the UK has failed after Dorothy Gibson, the National Pensioners Convention’s (NPC) general secretary, who was the class representative, officially withdrew the claim against defendant Pride Mobility Products.

Gibson has agreed to pay 60% of Pride’s costs, a figure amounting to roughly £309,000. Gibson had secured after-the event insurance through Burford Capital, underwritten by Great Lakes Reinsurance, for Pride’s costs up to £1.08m and her own disbursements in the case of failure.

The claim followed a 2014 decision from the Office of Fair Trading which found Pride had breached competition law by banning retailers from advertising prices online below Pride’s recommended retail price. Leigh Day represented Gibson in the case. Band Hutton Button represented Pride.

The second collective class action to be brought in the UK under the new collective damages regime is still awaiting approval at the CAT. That is a separate £14bn consumer damages opt-out competition class action case against MasterCard, in which Quinn Emanuel Urquhart & Sullivan partner Boris Bronfentrinker is acting for the class representative.

The claimants, debit and credit card users in the UK, alleged that MasterCard charged retailers anticompetitive fees to process card payments and retailers passed that cost onto consumers.

A ruling on whether the claim will be allowed to proceed is expected this month.