The long, expensive and fiercely contested battle over the disclosure of the European Commission's Air Cargo cartel decision to private damages claimants (Emerald Supplies and other v BA and others) is over. On Monday 23 May 2016, the Supreme Court refused the claimants' application for permission to appeal against a Court of Appeal judgment of 14 October 2015 refusing disclosure of the decision. The Court of Appeal considered that disclosure, even within the confines of a confidentiality ring, would infringe the protection against self-incrimination afforded to airlines mentioned in the decision but against whom no finding of infringement of EU competition law was ultimately made (so-called "non-addressees"). This is a significant victory for the non-addressee airlines in this case who resisted disclosure. More widely it will provide some comfort to those who are caught up in a cartel investigation but not found to have infringed that they will not be "tainted by association" with the cartelists in follow on damages actions.
So, how did we get here? The UK air cargo damages action began in 2008, and is a mammoth multi-billion pound case involving hundreds (and at one point thousands) of claimants. In March 2014, before the non-confidential version of the decision was published by the Commission, the High Court ordered anchor defendant British Airways to disclose into a confidentiality ring a redacted version of its copy of the decision to the claimants.
Enter the non-addressees, and the battle over so-called Pergan protection (after Case T-474/04 Pergan Hilfsstoffe v Commission), which affords non-addressees who are referred to in the recitals of the decision the right to protect any such references to them from disclosure.
Initially, Mr Justice Peter Smith (the then presiding judge) accepted that Pergan protection applied and allowed non-addressee airlines, who were not party to the proceedings, to redact references to themselves from a version of the decision which had already been redacted on various grounds by the defendant airlines. The result, unsurprisingly after around 30 airlines and lawyers had been over it, was a very heavily redacted document that was difficult to read intelligibly. Peter Smith J described the redaction process as a "farce" and a "hopeless exercise" and ordered disclosure of an un-redacted copy of the decision into the confidentiality ring (save for redactions covering leniency material and legal professional privilege). The effect of this order, had it been put into effect, would have been to disclose to the claimants' lawyers all the references in the decision to non-addressee airlines which the judge had previously accepted were entitled to protection.
The non-addressee airlines appealed against this order to the Court of Appeal. They argued that disclosure in this manner of the names and allusions to liability of non-addressee airlines would violate the principle of the presumption of innocence. Unlike the addressee airlines, who had been found to be members of the cartel, the non-addressees had had no opportunity to challenge those references and allusions in the course of the Commission's cartel proceedings, or even to review them. The presumption of innocence, the non-addressees argued, is absolute. The claimants argued in response that the Court can and should undertake a balancing exercise between the rights of non-addressees and the interests of private damages claimants in being able to pursue follow-on proceedings efficiently.
The Court of Appeal's ruling of 14 October 2015 (EWCA Civ 1024) overturned Peter Smith J's order and robustly upheld the non-addressees' argument that Pergan protection is absolute and that national courts are not entitled to relax or amend Pergan safeguards recognised by the Commission. In the Court's judgment, Peter Smith J had failed to "give due recognition to the nature of the protection afforded by Pergan to the presumption of innocence and wrongly put in place a regime which is not sufficient to protect the rights which both the addressee and non-addressee airlines enjoyed in respect of Pergan materials".
Over a year since the hearing before the Court of Appeal, Supreme Court decided on 23 May 2016 that the claimants' application for permission to appeal did not raise "arguable points of law of general public importance which ought be considered by the Supreme Court at this time". The strength of the Court of Appeal's judgment undoubtedly had a big part to play in the Supreme Court's decision, but there are other factors which may have swayed the decision.
- Firstly, the Commission's Air Cargo cartel decision was annulled as regards the vast majority of the addressees in December 2015. Hearing an appeal over the disclosure of an annulled decision may have been difficult for the Supreme Court to justify.
- Secondly, the Commission did in fact eventually publish (and then withdraw, and then republish) a non-confidential version of the decision on its website. This first appeared on 12 May 2015, the day before the hearing began on this matter in the Court of Appeal. Although this is a redacted version of the decision with confidential (including Pergan) material removed, it cannot now be argued that the claimants have no access to any useful copy.
Whatever the ultimate reasoning for refusal, the Supreme Court has now called time on a piece of satellite litigation that should arguably never have arisen in the first place.
The Court of Appeal's ruling is of strategic significance in follow-on damages cases. Had Peter Smith J's disclosure order been allowed to stand, it would have opened the door to similar applications in future cases for disclosure of the un-redacted Commission decision into a confidentiality ring, leading to significantly increased risk for those who are embroiled in a cartel investigation but not ultimately found to have been party to the cartel.
Fieldfisher acted for two of the non-addressee airlines in this case.