Daniel Jowell QC, Brick Court ChambersDaniel Beard QC, Monckton ChambersDr Cristina Caffarra, Charles River Associates

THE DOW AND NATIONAL GRID LITIGATION

LESSONS FROM RECENT FOLLOW-ON DAMAGES CASES:

23 September 2014, Herbert Smith Freehills LLP

DANIEL BEARD Q.C.

NATIONAL GRID V ABB & ORS

DANIEL JOWELL Q.C.

COOPER TIRE V DOW

The drunken woman and her dog, the blindfolded man walking across a bar,

and the man looking for his keys under the lamppost…

A tale of cartel overcharges

Cristina Caffarra, 23 September 2014

Issues

• Complexity

• Link between quantitative analysis and factual evidence

• Prior beliefs

Synthetic rubber

Jan 92 Jan 94 Jan 96 Jan 98 Jan 00 Jan 02 Jan 04 Jan 06 Jan 08 Jan 10

price cost excess demand

Deflated using correct cost index: no overcharge

Deflated using incorrect cost index:positive overcharge

45

67

8P

rice

1990 1995 2000 2005 2010 2015Year

Observed (Nominal) pricesCorrectly-deflated pricesDeflated prices with overly-steep index

GIS: Choice of index makes overcharge find more likely

Deflating by wrong index can lead to finding overcharge when none exists

Indices with steep s-shape make finding overcharge more likely

RELEVANT FACTUAL EVIDENCE ON OVERCHARGE

• Nature of the cartel: were the terms clear and specific?

• Transparency: could adherence to the cartel be monitored?

• Buyer power/buyer resistance • Substitute products outside cartel (e.g. natural rubber)• Existence of producers within the region outside the

cartel (Kaucuk/TS)• Import of the products from outside the region• Non compliance/cheating; absence of enforcement

THE DEUTSCHE BAHN ISSUE

• Original Commission decision: Kaucuk and Trade Stomil cartelists• Original pleading: Kaucuk and Trade Stomil defendants • Case T-44-45/07, T-53/07 General Court: Kaucuk and Trade Stomil not

cartelists• Amended pleading: claim against Kaucuk and Trade Stomil withdrawn,

but umbrella claim in respect of their sales against other Ds • Case C-557/12 Kone • Deutsche Bahn [2014] UKSC 24 esp. paras. 27-28• Re-Amended pleading: Dow jointly and severally liable for K and TS sales• Cooper Tire v Dow Deutschland [2014] EWHC 1578 (Comm) –

amendment allowed, no reference yet as “no doubts” as to Supreme Court’s approach

DANIEL BEARD Q.C.

PASS ON ISSUES IN NATIONAL GRID

Indirect purchasers/passing on

Bad plc

Passin’ Thru LTD Low Margin Co.

Kind Ltd Sweet Ltd Innocent Ltd

x + £1 x + £1

y + £1 y y

BIG plc Ugly plc

Indirect purchasers/passing on

Bountiful plc

Buyer power inc Mega dist co.Y

Optimist Chancer

x + £1x + £1

Beautiful plc Unjustified criticism plc

Fleecer

Indirect purchasers/passing on

Bountiful plc

Buyer power inc

Pretty much everyone

x + £1

Beautiful plc Unjustified criticism plc

Regulatory controls

a ladder

SETTLEMENT TACTICS

QUESTIONS?