Truck cartel: BT and Royal Mail win £17.5m in damages from DAF

Court room gavel and scales of justice, traffic commissioner

Royal Mail and BT have been awarded approximately £17.5 million in damages against DAF Trucks following a decision by the UK’s Competition Appeal Tribunal.

The pair had claimed they were overcharged for vehicles leased and bought from DAF in the latest legal action in the long-running pan-European trucks cartel scandal.

The Competition Appeal Tribunal rejected DAF’s argument that BT and Royal Mail passed on the losses they suffered as a consequence of the Trucks cartel to businesses that bought their used trucks and through charging higher prices for their own services.

DAF Trucks declined to comment on the court's ruling.

The tribunal’s decision represents the UK’s first successful follow-on damages claim against a participant in the EU truck cartel.

A BT Group spokesperson said: “We welcome the verdict on yesterday’s ruling.”

Royal Mail also welcomed the Tribunal’s judgment, in what it said was a "clear and emphatic win". 

"It has taken us more than six years to get this outcome,” a spokesperson added.

The Tribunal’s decision comes after five major truck manufacturers were collectively fined £2.44 billion (€2.93bn) by the European Commission in 2016, for fixing prices between 1997 and 2011. 

The price-fixing related specifically to the market for the manufacturing of medium (weighing between 6 to 16 tonnes) and heavy trucks (weighing over 16 tonnes).

The European Commission's investigation revealed that MAN, Volvo/Renault, Daimler (Mercedes-Benz), Iveco and DAF had engaged in a cartel relating to:

  • Coordinating prices at "gross list" level for medium and heavy trucks in the European Economic Area (EEA). The "gross list" price level relates to the factory price of trucks, as set by each manufacturer. Generally, these gross list prices are the basis for pricing in the trucks industry. The final price paid by buyers is then based on further adjustments, done at national and local level, to these gross list prices.
  • The timing for the introduction of emission technologies for medium and heavy trucks to comply with the increasingly strict European emissions standards (from Euro 3 through to the currently applicable Euro 6).
  • The passing on to customers of the costs for the emissions technologies required to comply with the increasingly strict European emissions standards (from Euro 3 through to the currently applicable Euro 6).

The infringement was EU-wide and lasted 14 years, from 1997 until 2011, when the Commission carried out unannounced inspections of the firms.

The collusion identified by the Commission concerned the new emission technologies required by the Euro III to Euro VI environmental standards, specifically coordination on timing and coordination on passing on of costs of emission technologies for trucks compliant with newly introduced emissions standards.

The collusion was not aimed at avoiding or manipulating compliance with the new emission standards, said the Commission.

Daimler (Mercedes-Benz) was fined £902m (€1.08bn), DAF was fined £628m (€752m), Iveco £412m (€494m), and Volvo/Renault £560m (€670m).

MAN (part of Volkswagen Group) was not fined, as it reported the cartel to the European Commission.

Scania, also part of Volkswagen Group, was fined more than €880 million (£770m) for its participation in a truck cartel the following year (2017). 

Daf Trucks is one of several companies facing a £2 billion collective action in relation to the pan-European price-fixing cartel.

The Competition Appeal Tribunal gave the go-ahead last year for a claim brought by the Road Haulage Association (RHA) on behalf of the UK road haulage industry, which numbers around 18,000 claimants.

Alex Haffner, competition Partner at law firm Fladgate, said: “The UK Competition Appeal Tribunal (CAT) has confirmed that Royal Mail and BT can claim damages from Leyland DAF from whom they purchased/leased trucks during a period in which DAF were participants in a cartel of manufacturers that colluded on pricing and the roll-out of emissions technologies across Europe.

“That cartel was the subject of an infringement decision by the European Commission in 2016 that has spawned many claims by affected parties.

“After a five-week trial which heard a significant amount of expert evidence, the CAT held that the cartel had caused a defined percentage (5% of overcharge) to the claimants and DAF’s mitigation defences, in particular that the overcharge had been passed on by the purchasers, could not be upheld.

Haffner continued: “This is a very significant and seminal judgment.

“It is the first such judgment in the UK relating to the trucks cartel, in respect of which there are several other such claims currently in progress.

“It also confirms the UK as one of the foremost jurisdictions for the hearing of such claims particularly in view of the status of the CAT as a specialist tribunal which is well equipped to hear them. As such, its impact will be felt much more widely than just the protagonists in the case.”

Read more about the judgement in the next edition of Commercial Fleet.

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