Document 2 - Harbour Litigation Funding

Report on SCLF Autumn Event
11 October 2012
Competition Litigation in Scotland - Impact of Proposed BIS Reforms
The SCLF Autumn Event proved popular with a large number of practitioners and academics who had
to brave the foul weather in Edinburgh to participate in a roundtable discussion on the impact of the
proposed BIS reforms in Scotland.
Introduction from Iain Mansfield, BIS
The evening’s discussions began with an introduction from Iain Mansfield, an Assistant Director of
Competition Policy at the UK Government's Department for Business, Innovation and Skills (BIS).
Iain explained that the proposals are designed to encourage more private actions, both to help
business, and especially SMEs, to challenge anti-competitive behaviour and to help consumers and
business obtain redress if they have been victims of cartels or other forms of anti-competitive
business practices.
Iain provided an insight into the feedback received to the BIS consultation on the proposed reforms
published earlier this year. The consultation received 128 responses, however, 45 of the respondents
only responded to two questions, those being expanding the role of the Competition Appeal Tribunal
(CAT) and the approach to take when distributing unclaimed sums following an award of damages
(over half of the responses favouring distribution to Access for Justice).
The majority of respondents were in favour of expanding access to the fast track system to SMEs.
Iain however explained that the most controversial of the proposals was the possibility of an “opt-out”
system for collective actions - over half of respondents did not express a view and the ones that did
were fairly evenly split between for and against an opt-out regime.
Iain concluded by identifying the aspects of the reforms that would have ramifications for Scottish
competition litigation. Of note was the potential for claimants to choose between jurisdictions to seek
a particular remedy, for instance interdict over injunction. It was also suggested that the government
may have to consider applying a universal limitation period for competition law claims, thereby
removing the current time differences between England and Scotland.
Roundtable discussion
Professor Barry Rodger then chaired the discussion, inviting contributions from Mr Justice Barling
(President of the CAT), Heriot Currie QC, Graeme Young of Dundas & Wilson, Julia Clarke of Which?,
Stephen O'Dowd of Harbour Litigation and Dr. Till Schreiber of Cartel Damages Claims.
The panel were generally all in favour of the expanded role of the CAT and the introduction of some
form of opt-out regime for collective actions. Views were unsurprisingly mixed though on the scope
for more competition litigation in Scotland, whether before the CAT or the Court of Session.
The most ardent advocates of an “opt-out” system came from to two very different quarters. Mr.
Justice Barling, President of CAT, expressed the view that implementation of an opt out system was
only solution to the current problems associated with providing justice to consumers who may have
been victims of a cartel. These views were echoed by Julia Clarke of Which?, though Julia stressed
that Which? would like to see an expansion of an opt-out collective redress regime for a range of
consumer issues, not just competition law based claims. She also stated that Which? would support

the OFT being charged with fronting such claims as part of its consumer protection role, similar to the
regimes in Denmark and Norway.
Mr. Justice Barling cautioned against some other more specific aspects of the proposals including
introducing a rebuttable presumption of loss in cartel cases and any relaxation of joint and several
liability of cartel members. There was also discussion on the differing limitation periods for civil claims
in Scotland compared to England and Wales.
As regards interdict, Heriot Currie QC thought that the Commercial Court in Scotland has a fairly good
track record in dealing with interim relief, citing the recent unreported Lothian Buses / Edinburgh
Airport case, and that an alternative option to obtain interim relief from the CAT may not have a big
impact.
Graeme Young thought that it would be important for the CAT to be able to grant interim orders in
Scotland. This might help give practitioners more confidence in bringing claims, knowing their case
would be heard by a specialist judge. Beyond this he thought extending the jurisdiction of the CAT
might not lead to many more standalone damages claims, but that the collective opt-out regime was
likely to be much more attractive for the larger follow-on claims. To be effective though there also
needed to be some established system for collective settlements, perhaps something similar to the
Dutch model. This would be in the interests of both claimants and defendants. Graeme cautioned
against a potential confusion of the public enforcement role of the OFT (and the future CMA) and any
role it might be given to encourage or facilitate follow-on claims.
The general sentiment of the panel was that whilst any reform that increases protection of consumers
and SMEs, such reforms should not come at the expense of the already established mechanisms in
place in Scotland. With the Scottish Government considering proposals on collective redress, these
issues will dominate discussions for some time to come.
Stephen O'Dowd and Dr. Till Schreiber gave us an overview of their organisations and their activities
in respect of competition litigation. Stephen outlined the options for clients when considering funding
litigation and the market and different models for litigation funding (which go much further than just
funding competition litigation). Harbour is currently funding at least three competition claims, two
follow-on and one abuse of dominance claim. Harbour does not take full control of the claim. It
charges a % of proceeds, but subject to a floor equal to a multiple of the monies actually spent by
Harbour. The client however pays nothing if the case is unsuccessful. Dr. Till Schreiber outlined the
different model operated by CDC. CDC effectively buys up multiple from a number of victims of a
cartel (SMEs but also large corporates) and bundles them together to pursue them in its own name.
This type of 'book-building' provides interesting opportunities for external investors to fund claims that
might otherwise have been individually too small to pursue.
We then had time for some Q&A, with some interesting contributions from the floor, including some
thoughts on the reasons for the relatively low number of private actions before the Scottish courts
from Catriona Munro of Maclay, Murray & Spens, and some reactions from Lord Hodge, Principal
Commercial Judge at the Court of Session, on the practicalities of dealing with and managing
competition cases in the Scottish courts. The discussion then concluded with drinks at Dundas &
Wilson's offices.
The next SCLF event is on 'Competition Law and the Individual' on 21 November 2012.