The landmark representative action brought by consumer group Which? against sports retailer JJB Sports has been settled.
JJB will have to pay out over £18,000 to consumers who bought overpriced replica football shirts between 2000 and 2001. The company is also in negotiations to pay the other side’s “reasonable costs”, which are yet to be determined.
However, insiders point to legal fees, including those being payable to counsel Rhodri Thompson QC and Kieron Beal of Matrix Chambers, as reaching in the several hundreds of thousands of pounds.
Clyde & Co dispute resolution partner Julian Connerty, who was leading for Which?, said: “We will certainly be pushing for costs as Which?, as a charitable institution, is not liable to pay them.”
In addition, JJB has agreed to remunerate any more customers who step forward with proof that they bought an affected shirt. These customers are able to reclaim £10 per shirt by going to a branch of the retailer with either a receipt or the shirt itself.
The settlement ends the UK’s first-ever representative action. Which? was granted powers to bring claims on behalf of wronged consumers in front of the Competition Appeals Tribunal (CAT) under new laws that came into force in 2005, but this is the first time it has done so.
The action, which sought both exemplary and compensatory damages, had been stayed at the CAT some months ago with the parties locked in settlement negotiations, as first reported by The Lawyer (10 December, 2007).
DLA Piper competition partner Martin Rees, who was leading for JJB, told The Lawyer: “Our client is very happy with the outcome. We were expecting the CAT to be favourable to the claimant given that this was the first representative action.”
The £18,000 pay out represents £20 per shirt bought rather than per person named in the action.
Although an intensive media campaign by Which? and Clyde & Co in early 2007 promised to seek redress for “hundreds of thousands” of wronged consumers, the action eventually named 500 individuals.
This was because the time lag between the actual price-fixing and the action meant that customers had mislaid valuable evidence such as receipts, said Clyde & Co.
But one individual could buy more than one affected shirt and the final settlement reflects a penalty for around 900 shirts.
Connerty said: “What this case proves is that the question of an opt-in versus an opt-out system is key: having an opt-in system makes it very difficult for the claimant and for Which?”
Which? did not have to prove price-fixing: JJB Sports had already been fined £18.6m in 2003, after being found guilty of price-fixing by the Office of Fair Trading (OFT).