“… an acknowledgement in clear and unequivocal terms of the party's liability for an infringement of Article 101 of the Treaty and Article 53(1) of the EEA Agreement summarily described as regards its object, the main facts, their legal qualification, including the party's role and the duration of its participation in the infringement in accordance with the results of the settlement discussions; and an acknowledgement in clear and unequivocal terms of the party's liability for the behaviour of its subsidiaries which were involved in the cartel (the "relevant subsidiaries");”
“…an identical anti-competitive object and single anti-competitive aim”
“… the participants engaged in price coordination with a view to recovering increasing costs of steel, to limiting discounts to be granted to automotive customers and to achieving prices above the competitive level in the context of RFQs.”
“4. Automotive bearings are usually customer-specific products. To select the suppliers, the automotive customers generally issue requests for quotations (RFQs). An RFQ can be issued for a new contract or platform but also in the context of an existing contract or platform when a customer requires a change in the design of the bearings, wishes to increase production or seeks to obtain a reduction in the price of bearings. The whole selection process may last several months to one year. Automotive customers often request yearly discounts from the bearings suppliers, usually referred to as annual price reduction (APR) requests, to reflect yearly production efficiencies over the course of the contract. 5. Steel is a major cost element common to all bearing manufacturers. It is a cost item that is generally addressed in the price negotiation process with the automotive customers. During certain periods of the infringement steel prices increased significantly.”
“(28) JTEKT, NSK, NFC, SKF, Schaeff1er and NTN participated in a cartel the overall aim of which was to coordinate the pricing strategy vis-a-vis automotive customers. This included to varying degrees: (1) the coordination of the passing-on of steel price increases to automotive customers; (2) the coordination of responses to certain RFQs issued by automotive customers, in particular with respect to determining the undertakings that would quote, the price at which they would quote and the moment at which quotes would be submitted in response to such RFQs; (3) the coordination of responses to certain APR requests from automotive customers; (4) the exchange of commercially sensitive information, in particular on the status of negotiations with customers on the passing-on of steel price increases, on prices quoted or to be quoted to specific customers in the context of a RFQ, on APR requests or on general or specific contract terms. (29) There was in general a common understanding among participants not to undercut the other competitors' prices when prices increased as a result of an increase in the steel price so as to maintain existing shares of supply. Occasionally, the participants discussed complaints about non-compliance with the anti-competitive arrangements. (30) The evidence shows that the participants engaged in various anti-competitive practices through multilateral, trilateral and bilateral contacts.”
“…the second principle does not impose on the plaintiff an obligation to take any step which a reasonable and prudent man would not ordinarily take in the course of his business. But when in the course of his business [the claimant] has taken action arising out of the transaction, which action has diminished his loss, the effect in actual diminution of the loss he has suffered may be taken into account even though there was no duty on him to act.”
“The test is whether there is a realistic prospect of the plea succeeding at trial, the same test as that which applies on a summary judgment application. A realistic chance is one that carries some degree of conviction and is more than merely arguable: ED&F Man Liquid Products v Patel[2003] EWCA Civ 472 at [8]. However, the court must take into account evidence that can reasonably be expected to be available at trial, as well as the evidence before it, and should be wary of deciding difficult or new points of law in the absence of real facts: EasyAir Ltd v Opal Telecom Ltd[2009] EWHC 339 (Ch) , as approved in TFL Management Services Ltd v Lloyds TSB Bank plc[2013] EWCA Civ 1415 at [26], [27].”
“Judges are reluctant to impose excessive demands on claimants” (ibid paragraph [27-09]). In similar vein the authors of Chitty on Contracts (24th Ed, 2021) at paragraph [29-09]) observe that: “the standard is not a high one, since the defendant is a wrongdoer”
“217. Justice is not achieved if a claimant receives less or more than its actual loss. But in applying the principle the court must also have regard to another principle, enshrined in the overriding objective of the Civil Procedure Rules, that legal disputes should be dealt with at a proportionate cost. The court and the parties may have to forgo precision, even where it is possible, if the cost of achieving that precision is disproportionate, and rely on estimates. The common law takes a pragmatic view of the degree of certainty with which damages must be pleaded and proved: Devenish Nutrition Ltd v Sanofi-Aventis SA[2007] EWHC 2394 (Ch) ;[2009] Ch 390 , 408, para 30 per Lewison J.”
“33. The effect of a pleaded mitigation defence in general terms is to cast a significant burden on a follow-on claimant to disclose and give evidence about its business operations and procedures, which in many cases, as here, may extend over a period of many years. The process of giving disclosure and providing evidence about the financial controls of a large business is likely to be very time consuming and very expensive. The Supreme Court emphasised in the Sainsbury’s judgment at [189]: “The principle of effectiveness applies to the procedural and evidential rules by which the court determines whether and to what extent the claimant has suffered loss.”
“…it is averred that any Overcharge (if there was any Overcharge) would have been passed on.”
“c. In the alternative, if any Overcharge was caused, NTN avers that the Claimants passed any Overcharge through to their own customers or purchasers, or otherwise mitigated their loss (including, without limitation, through reducing their other costs). As part of their proof of loss the Claimants must prove not only that any alleged loss was passed on to them, but also that they did not pass on any alleged loss (or otherwise mitigate it) to their own customers or otherwise mitigate it, including through reducing their other costs. The Claimants bear the burden of providing disclosure and evidence as to how they dealt with the setting of their prices and the recovery of their costs in their business.”
“3. At all material times: a) FCA sought to control the costs of inputs purchased from its suppliers; b) To control these costs, FCA would (among other things) set costs targets. This included: i. Setting targets for the total cost for a particular vehicle or part of a vehicle; ii. Setting targets for the reduction of costs by specified amounts for a particular vehicle or part of a vehicle. c) These costs targets were set prospectively. d) Their purposes included providing a benchmark for those persons and departments within FCA who were responsible for procurement from suppliers (‘FCA’s procurement staff’). NTN infer that FCA measured the performance of FCA’s procurement staff in meeting these targets and provided incentives accordingly. e) FCA also had in place various systems for monitoring supplier performance in the EEA. Prior to 2018, the system applied in the EEA was the SQP system. In addition to the SQP system, the FCA Purchasing Team, with the assistance of the Finance Team, measures the commercial performance of suppliers, including whether the suppliers realised the cost savings being targeted by FCA. 4. The costs targets and cost savings measures outlined above were set for the purpose of ensuring that the total input costs for a vehicle or part of a vehicle did not exceed a specific level. 5. It is inferred from the fact that FCA used such costs targets that they were an effective means of controlling FCA’s costs. It is also inferred that such targets were also useful to FCA in planning overall budgeting and ensuring that they made a profit in line with their plans and expectations. FCA would set costs targets and seek to ensure that those targets were met, so that they could also plan the levels at which they priced their products. 6. If effective, a costs target would mean that FCA’s procurement staff would negotiate the prices of the various inputs so that the total costs of those inputs did not exceed the target. Therefore, if one particular input cost could not be reduced through FCA’s exercise of buyer power and other sophisticated procurement techniques, FCA’s procurement staff would look to reduce other input costs so that the overall target was met. 7. In the premises, if, quod non, FCA did pay an overcharge on any bearings, the effect of the costs targets would have been that FCA’s procurement staff would have negotiated lower prices with other suppliers to offset any overcharge (or part thereof). As such, any overcharge borne by FCA would have been mitigated, in whole or in part. 8. These particulars are provided based on the information available to NTN at this time. NTN reserves the right to provide further particulars following further disclosure or evidence. 9. In the light of the Amended Defence, and these further voluntary particulars, NTN will rely at trial on the heavy evidential burden on FCA to provide evidence as to how they have dealt with the recovery of their 7 costs in their business. That is information within FCA’s sphere, and NTN will rely upon any failure by FCA to produce such evidence in support of a plea inviting the Tribunal to draw adverse inferences against FCA at trial.”
“205…(i) a merchant can do nothing in response to the increased cost and thereby suffer a corresponding reduction of profits or an enhanced loss; or (ii) the merchant can respond by reducing discretionary expenditure on its business such as by reducing its marketing and advertising budget or restricting its capital expenditure; or (iii) the merchant can seek to reduce its costs by negotiation with its many suppliers; or (iv) the merchant can pass on the costs by increasing the prices which it charges its customers. Which option or combination of options a merchant will adopt will depend on the markets in which it operates and its response may be influenced by whether the cost was one to which it alone was subjected or was one which was shared by its competitors…”
“206. In our view the merchants are entitled to claim the overcharge on the MSC as the prima facie measure of their loss. But if there is evidence that they have adopted either option (iii) or (iv) or a combination of both to any extent, the compensatory principle mandates the court to take account of their effect and there will be a question of mitigation of loss, to which we now turn. … 208. There are two reasons why the merchants are correct in their submission that they do not have the legal burden of proving their loss of overall profits caused by the overcharge. 209. First, if the law were to require a claimant, which is a complex trading entity, to prove the effect on its overall profits of a particular overcharge, the claimant might face an insurmountable burden in establishing its claim. Were there to be such a domestic rule, it would very probably offend the principle of effectiveness. It is the duty of the court to give full effect to the provisions of article 101 by enabling the claimant to obtain damages for the loss which has been caused by anti-competitive conduct. … 211. We are also satisfied that the merchants are correct in their assertion that there is a legal burden on the defendants to plead and prove that the merchants have mitigated their loss. See for example, “The World Beauty”, 154 per Lord Denning MR; OMV Petrom SA v Glencore International AG[2016] EWCA Civ 778 ;[2016] 2 Lloyd’s Rep 432 , para 47 per Christopher Clarke LJ. The statement of the Court of Appeal in para 324 of its judgment in the present case is an accurate statement of English law: “Whether or not the unlawful charge has been passed on is a question of fact, the burden of proving which lies on the defendant … who asserts it.”
‘[W]hen in the course of his business [the claimant] has taken action arising out of the transaction, which action has diminished his loss, the effect in actual diminution of the loss he has suffered may be taken into account …’ (Emphasis added).
“… not only that any alleged loss was passed on to them, but also that they did not pass on any alleged loss (or otherwise mitigate it) to their own customers or otherwise mitigate it, including through reducing their other costs.”
“In our judgment, before a purely general plea of mitigation through business cost reduction processes can be pleaded, in the way that DAF seek permission to do, there must be something identifiable in the facts of the particular case that gives rise to a prima facie inference that there may well be a direct causative link between the overcharge alleged and the prices paid by the claimant for other supplies that reduced the amount of the loss resulting from the overcharge. What is sufficient to give rise to such an inference will vary from case to case, but it may be found in facts such as a claimant’s knowledge of the nature and amount of the overcharge (such that it is inherently likely that a claimant would seek to address it), the gross amount of the overcharge as a proportion of the claimant’s relevant expenditure (the higher the proportion, the more likely it is that some step would have been taken to mitigate the impact), the relative ease with which the claimant’s business could be expected to reduce certain input costs or input costs generally, or the fact that other supplies made by the defendant or its associates to the claimant have been renegotiated in years following the increase in the prices alleged to have been caused by the anti-competitive conduct.”
“We therefore hold that it is not sufficient for a defendant in the position of DAF to plead a defence of mitigation on the basis of broad economic theory and nothing more, where the effect of that would be to place a heavy onus on a claimant to disclose and explain its financial procedures and operations during the period of the operation of the cartel (or, if shorter, the period during when the overcharge is alleged to have been mitigated). There must be some plausible basis in fact for alleging that the claimant would have reduced the amount of the overcharge loss in a manner which amounts to legal mitigation. That is not to suggest that a defendant must have documents or evidence at the pleading stage capable of proving what the claimant did in response to the overcharge or that it was effective. It is understood that this material is unlikely, by its nature, to be available in sufficient detail. What is needed is some plausible factual foundation for the application of the broad economic theory in the way required to satisfy the British Westinghouse test that is relied upon, and for there being a causative connection between overcharge and cost cutting.”
“33. Ultimately, NTN can only point to the setting by FCA of benchmark targets for costs reduction. The setting of targets does not mean that those targets were achieved: in the real world, targets are often missed. If they were missed, we cannot see how the setting of the target and the work by procurement staff to meet a target that was missed could be said to have mitigated the overcharge. If the targets were achieved, we do not see how this could plausibly be linked to the overcharge in circumstances where the overcharge was unknown. It would have been achieved, on this basis, by the hard work of procurement staff, independently of the overcharge. If the target was exceeded because the efforts to reduce other costs were very successful, then again there would be no mitigation of the overcharge: the reduction in costs would again have been achieved anyway as a consequence of the hard work of procurement staff, independently of the overcharge. 34. The theory that the setting of targets led to mitigation of the overcharge seems to us to depend, as [counsel for FCA] submitted, on various unpleaded facts which were speculative and without any factual foundation in any material in the evidence. In particular, the argument assumes that procurement staff would not negotiate as hard as they could for lower prices, but would only do so to the extent required to meet the target. On this theory, as we understand it, the overcharge would be in practice compensated for because the existence of the target operated as an effective cap on the costs reductions which procurement staff were seeking. If, therefore, that cap were reached, then the achievement of the overall target would mean that the reduction in other costs would have compensated for the overcharge. There is, however, nothing in NTN’s pleading, or in the simple existence of a target as a “benchmark”, which suggests that FCA’s workforce would not negotiate to reduce costs as hard as they could, or explains why they would not wish to do so. Indeed, Mr. O’Donoghue in his submissions relied upon the sophistication and power of vehicle manufacturers as contract negotiators. NTN’s implicit case that FCA’s negotiators would not negotiate as hard as they could, and would stop when they had reached their target because the target operated as a cap on what they were required to do or did, is unpleaded and speculative. In our view, it is not a case which carries any degree of conviction at all. Rather, it is at best a speculative theory for which NTN are hoping to find support by way of their requests for disclosure. That is not a proper and sufficient basis to grant permission for the Voluntary Particulars to be filed.”