Antitrust Alert: UK decision in BASF vitamins cartel litigation clarifies time limits for follow-on damages claims

On 22 May 2009, the UK Court of Appeal declared that the two-year time limit for filing follow-on damages claims brought before the UK Competition Appeal Tribunal, will only be suspended in the event of an appeal against a government infringement decision against the defendant, but will not be suspended pending the outcome of an appeal of  the amount of fine imposed.  Therefore, the court decided that a follow-on damages claim brought against BASF, for its involvement in an illegal vitamins cartel, was time-barred. 

This decision will mean that a number of other claims against BASF, which were stayed pending the outcome of this decision, will also likely be time-barred.  The decision also will affect claimants in unrelated follow-on damages claims that wrongly interpreted the rules on time limits, and it signals to would-be claimants that they should not delay bringing follow-on damages claims where only the amount of the fine is being appealed.

Follow-on damages claims in the UK

Where the European Commission or the UK Office of Fair Trading issues an infringement decision, finding that a company has engaged in price fixing or has abused a dominant position, a claimant can rely on that decision to bring a follow-on damages claim.  This makes it easier for injured parties to bring claims against companies that infringe competition laws and is central to the policy of the European Union and its Member States to encourage private damages actions for breaches of competition laws, in order to increase their deterrent effect.

Follow-on damages claims in the UK can be brought before either the Competition Appeal Tribunal (“Tribunal” – a specialist court and considered by some to be claimant friendly) or the High Court (a non-specialist court, which often will require a more lengthy and expensive process).  Each court imposes different time limits for bringing claims and, in addition to tactical reasons for preferring one court over the other, there are practical or timing considerations to consider when choosing where to bring a follow-on claim.  Whereas a claimant has six years to bring a claim before the High Court, follow-on damages claims before the Tribunal must be brought within two years from the later of (i) the infringement decision and (ii) the conclusion of any appeal against such infringement decision.

The BASF decision clarifies the time limit for claims brought before the Tribunal. 

BCL Old Co Limited (and others) v BASF (and others)

The claimants in the BASF case had indirectly purchased vitamins from BASF.  In a 2001 infringement decision, the EC found that BASF had been involved in illegal price fixing of vitamins, and it imposed a fine of €296 million.  In 2002, BASF appealed the amount of fine, although it did not appeal the EC infringement decision itself.  In March 2006, the European Court of First Instance (“CFI”) ruled in favour of BASF and reduced the amount of fine to €237 million.  The claimants initiated their follow-on damages claim against BASF before the Tribunal in March 2008.

The 2008 follow-on damages claim was filed more than six years after the EC’s 2001 infringement decision against BASF (and therefore outside the six-year time limit of the High Court), but just under two years after the CFI’s decision to reduce the fine.  The issue in this case was whether the Tribunal’s two-year time limit is suspended where there is an appeal against the fine, or only where there is an appeal of the infringement decision itself.

The Tribunal declared that the time limit is suspended by an appeal against the fine.  On appeal, the Court of Appeal reversed, siding with BASF, and declared the claim time-barred.  The Court of Appeal concluded that, although an infringement decision and the decision imposing a fine are contained in a single decision document, substantively they are distinct.  Section 47A of the Competition Act, which lists the types of appeals that will suspend the two-year time limit set by rule 31 of the Tribunal Rules, refers only to appeals against infringement decisions.  Therefore, said the Court of Appeal, an appeal against the fine does not equate to an appeal against an infringement decision, and the two-year time limit will not be suspended by such an appeal.

Implications for would-be claimants

One argument made by the claimants was that an appeal against the fine may give rise to issues concerning the gravity, duration, and scope of the infringement that would also be relevant to the degree of liability of the defendant in a follow-on damages claim.  The Court of Appeal dismissed this argument, observing that the Tribunal remains bound by the unchallenged infringement decision, whatever may be said about the infringement in the context of an appeal of the fine.  However, the Court of Appeal acknowledged that, if an appeal against the fine may have serious implications for follow-on damages claims, the Tribunal can stay the claim pending the outcome of the appeal.

Would-be claimants now know they should not hesitate to bring a claim before the Tribunal, where the defendant is appealing a fine imposed by the European Commission or Office of Fair Trading, even if the appeal could affect the damages claim.  Delay risks being time-barred.  It should be noted, however, that there is a restriction on a very quick follow-on claim:  where the time limit for bringing an appeal against an infringement decision has not expired (two months for OFT decisions; two months and ten days for EC decisions) or where an appeal against an infringement decision has been brought, a claim cannot be issued without the permission of the Tribunal.

Ultimately, the Tribunal has the power to extend the two-year time limit, and therefore failure to bring a claim within this period will not necessarily be fatal.  Nevertheless, even where there may be grounds for extending the limitations period (as in the BASF case, given the uncertainty in interpretation of the law), in the future the Tribunal likely will be reluctant to grant an extension on those grounds.  Alternatively, if the two-year period has expired, a would-be claimant still may be able to bring a claim before the UK High Court.

The UK – an attractive forum for follow-on damages claims

Notwithstanding this set-back for the claimants in the BASF case, the UK remains an attractive forum for bringing follow-on damages claims, compared to many other EU Member States.  Extensive UK disclosure rules often operate to a claimant’s advantage, and claimants can rely on their own expert witnesses, rather than having to contend with a court-appointed expert.   Although exemplary or restitutionary damages are not available (in contrast to the United States), compensatory damages are available, and UK rules regarding the payment of interest on damages are considered favourable to claimants.

Read more on the Court of Appeal judgment, BCL Old Co Limited (and others) v BASF (and others), at the Competition Appeal Tribunal web site

Lawyer Contacts

For more information, please contact your principal Jones Day representative or either of the lawyers listed below.


Stephen Brown



Matt Evans



Tom Bainbridge




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