Freshfields, Ashurst in first ever CAT damages trial

Freshfields Bruckhaus Deringer and Ashurst are defending companies found to be part of the vitamin cartel in the first ever damages claim to be heard by the Competition Appeals Tribunal (CAT).

Freshfields clients Hoffmann-La Roche and Roche Products and Ashurst client Aventis are being sued for damages in the CAT by egg and poultry company Deans Foods, which claims the defendants’ cartel activities unfairly inflated the price it paid for vitamins.

The Enterprise Act, which came into force in June last year, provided the CAT, which is headed by Sir Christopher Bellamy, with jurisdiction to hear damages claims, but this new power has largely gone unnoticed.

“Not many people may have noticed the CAT has these new powers, but here they are being used,” said Freshfields competition partner John Lawrence, who is handling the case for Hoffmann-La Roche, judged by the EU as the lead member of the vitamin cartel.

Herbert Smith’s Brussels managing partner Stephen Kinsella said a successful result for Deans Foods’ law firm Taylor Vinters would be good news for UK-based competition lawyers, both acting for claimants and defendents, in cartel-related damages cases and for the CAT.

“We have never had a damages award of this type – for breach of competition law – progress to judgment in any UK court, and it’s exciting that there are companies in the UK seeking damages for a breach of EU law, making use of the specialist tribunal of the CAT. A significant award of damages in this case could highlight the UK as an attractive jurisdiction and even encourage forum shopping from companies outside the UK,” he said.

In November 2001 the EU hit a number of European and Japanese companies, led by Switzerland’s Hoffmann-La Roche, with fines totalling E855m (£576m) for operating an international vitamin cartel.

Kinsella said that while Deans Foods could prove the prices it paid for vitamins from Hoffmann-La Roche and Aventis were too high, it may have trouble claiming damages if it cannot prove these prices were not just passed onto its customers, and ultimately the high street consumers of its products.