Robbing Peter to pay Paul - limitation post-Consumer Rights Act

There are high hopes for the Consumer Rights Act 2015 (CRA) with the expectation that it will remedy the blatant defects of the old style private damages regime.  But the rules on limitation raise complex questions which could deprive the reforms of many of their intended benefits – for some years to come at least.

The content of the reforms is covered in my previous posts.  Essentially, with effect from 1 October 2015 the CRA confers on the CAT the power to hear standalone competition law actions (previously only ‘follow-on’ actions could be brought in the CAT) and introduced new procedures for collective proceedings, including both opt-in and opt-out proceedings.

The limitation ‘problem’ derives from new Rule 119 of the CAT Rules 2015 which, in respect of certain claims arising before 1 October 2015, sets in stone the old limitation rules and provides narrow gateways out of them.  These old limitation rules were intended to cater for follow-on actions and essentially provide that the limitation period expires two years after the later of the date an infringement decision (has become definitive) or the date the cause of action accrued. 

Specifically, Rule 119 preserves Rule 31(1) to (3) of the CAT Rules 2003 so that this continues to apply where the relevant claim arose before 1 October 2015 for the purposes of determining the limitation period which would apply in respect of the claim if it were to be made on or after 1 October 2015. 

The immediate problems appear to be the following: 

(1)   Given the clandestine nature of cartels the transitional rules will hamper the claims that have already crystallised since the trigger point is when the cause of action accrued.

(2)   The continued application of Rule 31 (1)-(3) calls into question the bringing of a true standalone claim in the CAT since that rule – which presumes an infringement decision – was predicated on the basis of old style follow-on claims.

(3)   Follow-on claims accruing in the transitional period will be subject to the old rules.  An important consequence is that claimants will need to seek the CAT’s permission to bring a claim before an infringement decision becomes definitive.

(4)   Collective proceedings may be rare for the next few years, not least since they appear to suffer from the same restrictions which cannot be cured by transfer of proceedings to the CAT.

Claims relating to losses that straddle 1 October 2015 and hybrid claims combining multiple causes of actions will no doubt require more limitation period gymnastics. 

The rationale behind the saving provisions – the text  of which was not consulted on – was apparently to preserve the position of parties who had let usual limitation expire in anticipation of bringing a claim when an infringement decision became definitive.  So, rather like the idiom of ‘robbing Peter to pay Paul’, in seeking to keep open the avenues to compensate those persons the transitional rules may have strangled many other claims in the pipeline.

Possible ways around this conundrum have been suggested such as interpreting the new limitation rules without regard to the need for an infringement decision.  The CAT’s 2015 Guide to Proceedings provides further detail on the time limits for bringing claims but stresses that these are merely general guidelines, and it is beyond the scope of the Guide to provide definitive advice.  It states that determining whether a particular claim is still in time can be a complex matter, and potential claimants should seek legal advice at the earliest available opportunity.  That’s probably right.