Osborne Clarke successful in Court of Appeal cartel judgment

In a significant judgment for follow-on competition damages claims, the Court of Appeal has allowed an appeal for the claimants in Granville Technology Group Ltd v LG Display Co Ltd, increasing the level of overcharge and reducing the extent of pass-on applied at first instance.

Osborne Clarke has represented the claimants, Granville Technology Group and OT computers , in their damages claim relating to the LCD cartel as well claims relating to the DRAM and CRT cartels, in the Commercial Court and the Court of Appeal.

The case arose out of the European Commission's finding that a cartel existed between October 2001 and February 2006 in the worldwide market for thin film transistor liquid crystal display ("LCD") panels, which are the screens used in computer monitors, notebooks and televisions. The European Commission fined the LG defendants €215 million for their participation in the cartel.

The claim was one of the first few cartel damages claims to go to a full trial. While the claimants had been successful in the High Court judgment in their claim for damages, they appealed the judgment on the basis that it significantly undervalued their loss.

On appeal, the claimants challenged the trial judge’s approach on three principal grounds:

• that he had wrongly applied a principle of "erring on the side of under-compensation" when assessing damages;
• that he had made clear errors in assessing the overcharge caused by the cartel; and
• that he had failed to apply the correct legal test when determining the extent to which the claimants had passed on the overcharge to their own customers.

The Court of Appeal agreed with Osborne Clarke's clients that the judge had made an error of law when assessing the overcharge and the level of downstream pass-on by "erring on the side of under-compensation".

The Court was satisfied that it could vary the trial judge's findings and it increased the overcharge figures to 10% for monitors, 6% for notebooks and 16% for TVs, and reduced the level of downstream pass-on to 60% of the overcharge.

Osborne Clarke comment

The case confirms an important principle for competition damages litigation: courts assessing damages in cartel cases must aim to award the correct level of compensation, without erring more towards under-compensation so as to avoid the risk of over-compensation where there is uncertainty. When the evidence will only take the court so far, the court will assess damages as best it can with the use of "sound imagination and a broad axe", aiming to award the right figure without erring in either direction.

Osborne Clarke's team

Osborne Clarke’s competition litigation team was led by Andrew Bartlett, instructing Thomas Raphael KC and Stefan Kuppen as counsel.