Collective proceedings - robust approach to determining carriage prior to certification (Hunter v Amazon.com)

Key points

• This is the first example of the CAT deciding a carriage dispute as a preliminary issue before certification. The CAT confirmed that this is the preferred approach, as opposed to “rolled up” hearings addressing both carriage and certification.
• The test for determining a carriage dispute is assessing “suitability” of the competing proposed class representatives. The CAT has wide discretion as to how to conduct that assessment.
• In this case, the suitability of the parties’ experts’ methodologies on proof of abuse and quantification of loss, and whether they were practically workable, were the determining factors.
• Even though Ms Hunter lost the carriage dispute, her claim has not been dismissed, but stayed. It may be revitalised if Mr Hammond’s CPO application fails or a CPO is granted but later revoked.

In a recent decision, the CAT has given guidance on how carriage disputes between competing proposed class representatives (PCRs) will be addressed in future. This case concerned two competing PCRs, Ms Hunter and Mr Hammond, who are each seeking an opt-out collective proceedings order for their proposed claims against Amazon for alleged infringements of UK competition law related to the functioning of its “Buy Box” feature.

This is the first example of the CAT deciding a carriage dispute as a preliminary issue in advance of certification, rather than as part of a “rolled up” hearing addressing carriage and certification together. The CAT’s experience in a carriage dispute related to proposed FX collective actions, has been that “rolled up” hearings are more expensive but no better at enabling the CAT to make a decision, and that deciding carriage disputes as preliminary issues will be the preferred approach going forward.

Decision

In determining a carriage dispute, the CAT must assess the “suitability” of each PCR, which confers on the CAT a broad and multifaceted discretion. However, the CAT’s assessment does not have to take account of the merits of the competing claims. Which claim is broader, or first to file, are unlikely to be relevant considerations.

In this case, the CAT considered the key differences between the two PCR’s claims. The claims substantially overlapped in many ways, with nuanced differences in the abuses alleged, but significant differences in each PCR’s expert’s respective methodologies on proof of abuse and quantification of losses.

The differences in experts’ methodology were therefore key to assessing suitability. The two key questions the CAT considered were: (1) which methodology was better suited to articulating and resolving the PCRs’ claims, and (2) whether there was a difference in practical workability of the methodologies, or if either was unworkable.

Naturally, in order to demonstrate suitability, each PCR sought to undermine the methodology of the other’s expert. However, crucially, Ms Hunter’s expert stopped “well short” of calling Mr Hammond’s expert’s methodology unworkable.

The Tribunal ultimately ruled in favour of Mr Hammond, finding him most suitable to act as PCR. In doing so, the CAT found that Mr Hammond’s expert’s methodology sought to establish a counterfactual which was more closely aligned with the abuse alleged, whereas Ms Hunter’s expert’s proposed methodology did not align with what what the CAT held was the “true” counterfactual (the operation of the algorithm Amazon to select the featured offer in its “Buy Box”, without the alleged abuse).

In considering practical workability of Mr Hammond’s expert methodology, the CAT considered a number of factors determinative. These included that Ms Hunter’s expert was not willing to assert that Mr Hammond’s expert’s methodology was unworkable. The Tribunal also took into account the fact Mr Hammond’s expert had already considered how to resolve practical difficulties with his methodology, and its view that careful case management could ensure sufficient co-operation between the successful PCR’s expert and Amazon’s expert in an apparent effort to ensure that the PCR’s methodology is workable.

While it is open to the CAT to permit more than one PCR to proceed to certification, the overlap between the proposed class members, and similarly of the respective PCRs’ proposed claims, precluded that in this case.

Mr Hammond’s application is therefore permitted to proceed to the certification stage. Ms Hunter’s application was stayed rather than dismissed, on the basis that it was not hopeless, but merely came second to Mr Hammond’s. That stay may be lifted if Mr Hammond fails to obtain certification.

Take-aways

A carriage dispute will turn on the nature of the competing claims, but where the abuses alleged are similar this case may provide some guidance as to how the CAT will seek to assess suitability. PCRs will need to ensure that their proposed methodology for proving abuse and quantifying loss aligns closely with their claims, but also remains practically workable. The CAT has signalled that it will take an interventionist approach to case management to ensure a PCR’s experts are able to put forward appropriate expert evidence.

Unless a PCR’s application for a collective proceedings order is hopeless, it is unlikely that it would be dismissed in the event the PCR loses a carriage dispute. This would potentially enable the losing PCR to resuscitate their claim in the event that the successful PCR fails at some hurdle before trial, although there would be a number of practicalities to be dealt with in that situation, including whether funding and/or ATE insurance would still be available to that PCR.

For any PCR, a carriage dispute is likely to be a costly and risky exercise. Even if carriage is determined as a preliminary issue, each PCR will have to spend significant sums in order to issue their application for a collective proceedings order. For the losing party (and their funders), it will likely be cold comfort that their application may be merely stayed and not dismissed.