UK High Court Ruling Sets High Burden Of Proof Requirement For Competition Cases

by Robin Pilgrim, LawAndTax-News.com, London

29 May 2003

A recent ruling in the UK's High Court has set a high burden of proof level for plaintiffs in competition cases, a state of affairs which many believe will deter other firms from bringing competition damages cases before the UK courts.

The LMG news service reported this week that six members of two liner shipping conferences - or EC-sanctioned container shipping cartels - have been cleared of charges of anti-competitive behaviour levelled at them by BCL Shipping Line operator, Yeheskal Arkin.

BCL was foced out of the market in 1992, leading Mr Arkin to allege that the companies had breached the antitrust rules contained in Articles 81 and 82 of the European Treaty, by signing anti-competitive agreements and employing predatory pricing tactics.

However, the High Court judge ruled that although the firms which comprised the two conferences were collectively dominant, the aggresive price slashing techniques that they employed were not intended to push BCL out of the market.

The judge also announced that there was no causative link between the protection afforded to the conferences by the block exemption to the terms of Article 81 of the Treaty and BCL's losses, arguing that Mr Arkin's mismanagement of the company's finances had led it into 'a completely hopeless loss-making downward spiral'.

Speaking to LMG, Freshfields Bruckhaus Deringer competition partner, David Aitman suggested that a specialist competition court might have ruled differently.

'The court said the price cutting was to build and retain market share after a new entrant to the market. Commercial judges might have that opinion but there's a terribly fine line between retaining market share and trying to eliminate your competitors,' he observed.

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