Court of Appeal rules on limitation and concealment in competition damages claim

04 September 2015. Published by Chris Ross, Partner

In the recent decision of Arcadia Group Brands Ltd & Ors v Visa Inc & Ors[1] ...

… the Court of Appeal held that a group of well-known high street retailers could not plead their claims in relation to alleged inflated multilateral interchange fees between 1977 and 2007, on the basis that they were time-barred.


Multilateral Interchange Fees (MIFs) are fees charged by a debit or credit cardholder's bank (the issuing bank) to a merchant's bank (the acquiring bank) for each sales transaction at a merchant outlet made with a relevant payment card. The fees are either agreed bilaterally, between issuing and acquiring banks, or multilaterally, by means of default rules binding all banks participating in a payment card scheme. A MIF can be a percentage, a flat fee or combined fee (percentage and flat fee). Different MIFs apply for different territories and different types of card.

On 19 December 2007, the European Commission issued a decision finding that MasterCard's MIF for cross-border payment card transactions (intra-EEA) violated the then Article 81 of the EC Treaty rules on restrictive business practices (now Article 101(1) TFEU). MasterCard appealed. The decision was affirmed by the Court of Justice of the EU in September 2014.

The European Commission issued a Statement of Objections to MasterCard in July this year alleging that its MIFs for transactions in the EU using MasterCard cards issued in other regions of the world (inter-EEA) were also in breach EU competition laws. Such inter-EEA fees are not covered by Regulation 2015/751 on interchange fees for card-based payment transactions.[2]

The Visa card-payment scheme was also subject to scrutiny by the European Commission over a number of years. However, during the period 2010 – 2014 Visa entered into certain commitments in relation to MIFs with the European Commission. As a result, no infringement decision has been issued in respect of Visa.


The appellants are a group of well-known UK high street retailers including B&Q, Debenhams, Argos and Morrisons (Retailers). In 2013 they brought an action against Visa for damages in relation to Visa's intra-EEA, domestic UK and domestic Irish MIF. In particular, the Retailers allege that the MIFs set by Visa for a period dating back to 1977 were in breach of EU, UK and Irish competition law. The Retailers submit that either no MIF should have been payable, or alternatively, that lower levels of MIFs should have been applied.  

Visa applied to strike out those parts of the claims alleging infringements of competition law prior to 23 July 2007 and 4 October 2007 (Limitation Dates), being the dates 6 years before the claims were issued, on the basis that the six year limitation period for tort-based claims had expired. Alternatively, Visa applied for summary judgment under CPR Part 24.

In response, the Retailers relied on section 32(1)(b) Limitation Act 1980 (Limitation Act), claiming that facts relevant to the action had been deliberately concealed by Visa, and as such the limitation period should not begin to run until the time they had discovered the concealment or could with reasonable diligence have discovered it.

At first instance the court accepted that the 'full picture' was not available to the Retailers, but found that the pre-2007 facts which were known or discoverable by the exercise of reasonable diligence were sufficient to enable the appellants to plead a claim which established a prima facie case. In particular, the court referred to a Commission decision dated 24 July 2002 referring to Visa's EEA MIF, a number of OFT decisions and press releases in 2005 and the December 2007 MasterCard infringement decision. 

The High Court granted summary judgment in favour of Visa. The Retailers appealed.


The Court of Appeal dismissed the appeal. There is, in principle, no reason why a different limitation test should be applied to competition cases and the Judge had not erred in applying the legal principles in relation to section 32(1)(b) of the Limitation Act.

Section 32(1)(b) of the Limitation Act

The Retailers had to satisfy a 'statement of claim' test i.e. establish that the facts concealed by Visa were essential for them in order to establish a prima facie case. Their view was that this meant all facts 'necessary and sufficient to enable the appellants to come to an informed view on the economic assessments.'

In this respect, the Retailers argued that, in the absence of information as to how the MIFs were fixed by Visa and their levels and the Retailers' ignorance of the amount of the overcharge of the Merchant Service Charge (MSC), the Retailers were unable to assess, prior to the commencement of proceedings:

  • Whether or not there had been a restriction of competition;
  • Whether or not the respondents would be able to obtain an exemption under Article 101(3) TFEU; and
  • What would be the likely amount of damages.

The Court of Appeal considered the authorities relating to the 'statement of claim' test and concluded that for the purposes of s.32(1)(b):

  • A fact "relevant" to a cause of action is a fact without which the cause of action is incomplete;
  • Facts that merely improve the prospects of success are not facts relevant to the cause of action;
  • Facts bearing on a matter which is not a necessary ingredient of the cause of action but which may provide a defence are not facts relevant to the cause of action.

The court accordingly held that knowledge of the manner and mechanisms by which the MIFs were set by Visa were sufficient to sustain a pleaded case that there had been a restriction of competition. The precise way in which the MIFs were fixed, over and above what was already pleaded, was 'no more than something which goes to the strength of the appellants' claims and the commercial considerations bearing on the advantages and disadvantages of commencing the proceedings' (para 59). Those facts were not essential to complete the cause of action and, as such, s.32(1)(b) did not assist the Retailers.

The Retailers argued that competition claims were far more complex than the types of case dealt with in the authorities, taking into account the need to show an infringement that had an appreciable effect on trade. The Court of Appeal rejected this argument and emphasised the policy considerations of finality and certainty in the law of limitation.

Limitation: EU jurisprudence

The Court of Appeal also dismissed the Retailers' submission that the domestic law of limitation contravenes and must give way to the EU principles of effectiveness and full compensation:

  1. It was well established that domestic law imposing a limitation period is perfectly consistent with EU jurisprudence, provided that it does not make the recovery of compensation practically impossible or excessively difficult and even though, where claims are barred by limitation, the consequence will be to restrict the recovery of full compensation;
  2. The barring of claims falling under the Limitation Dates was not an infringement of the EU principle of effectiveness. The Retailers stated that the EC MasterCard decision in 2007 gave them the comfort to bring the proceedings (hence not bringing them earlier), but the decision did not disclose any new facts necessary to complete the cause of action; and
  3. Article 10(2) Damages Directive 2014/104, which provides that limitation periods shall not begin to run before the infringement of competition law has ceased, is not applicable. The Directive does not have to be transposed into national legislation until 2016 and does not have retrospective effect.

New limitation point

As an alternative case, the Retailers argued that the limitation period did not begin to run until the Commission's MasterCard decision on 19 December 2007. However the argument was not advanced in the High Court or as a ground of appeal and, the court found, had been raised too late, not least because it would require an investigation into the 2007 MasterCard decision and the previously available material in the public domain.


The Court of Appeal confirmed that competition damages actions are no different from other damages claims, and that the ordinary limitation rules apply. Although this decision is not entirely unexpected in terms of limitation, it is a major set-back for claimants bringing actions in this field, in particular since the claims struck out in this case were valued at an estimated £500m.

The decision reinforces that potential claimants in competition damages claims must be alive to any information in the public domain that might start the clock running against them for limitation purposes. The Damages Directive will affect limitation once national implementing legislation across the EU is in force but it is currently extremely unclear what the effect of the Directive will be, particularly considering that the Directive expressly provides that any changes to national legislation are not to be retrospective in effect.

It should also be noted that the Consumer Rights Act 2015 will come into effect on 1 October 2015 and will remove the current special limitation rules that apply to follow-on damages actions brought in the Competition Tribunal Appeal (CAT) under section 47A Competition Act 1988. The general limitation rules will be applied in the CAT in relation to both follow-on and standalone damages actions.

[1] [2015] EWCA Civ 883

[2] Regulation (EU) 2015/751 on interchange fees for card-based payment transactions was enacted to provide guidelines on the mechanism that determines a minimum price merchants must pay for accepting the organisation's payment cards. Under Articles 3 and 4 of the Regulation, MIF rates should be set at no more than 0.2% for debit cards and no more than 0.3% for credit cards, respectively.

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