“(14) The Commission agrees that during the telephone era, FX trading was fairly opaque. As stated in recital (12), at that time, information about FX trades was proprietary to the two counterparties. However, in contrast, nowadays trades entered on electronic platforms are cleared and settled electronically. Therefore, contrary to what Credit Suisse claims, FX markets are now regarded as transparent because real-time prices (including the best available bid and ask prices) and corresponding trading volumes are available in the platforms to virtually all participants. This information on best bid and ask prices is constantly updated, without interruption. The information available on electronic platforms is therefore sufficient for traders to make their own judgment about the evolution of FX rates before entering into FX transactions. (15) There is no need for traders to engage in contacts, including participating in multilateral chatrooms, to gather non-public information not present on those platforms to make their trading decisions.”
“The exchange of forward-looking information and price information is particularly likely to lead to a collusive outcome on the market. Therefore exchanges of information about such future intentions are, by their very nature, harmful to the proper functioning of normal competition.”
“(445) First, the role of experience and, therefore, foreseeability in that regard do not concern the specific category of an agreement in a particular sector, but the fact that it is established that certain forms of collusion, such as, in the case at hand, the recurrent and extensive exchanges of current or forward-looking commercially sensitive information between competitors about confidential aspects of their market conduct which allowed them to engage in coordination of their trading activities, are, in general and in view of the experience gained, so likely to have negative effects on competition that it is not necessary to demonstrate that they had such effects.”
“(287) By occasionally coordinating (or standing down), the participating undertakings sought to gain an advantage over competitors that did not participate in the STG Lads chatroom. This concerns certain instances where the participating traders who had disclosed that their open risk positions at the fix were of a certain type spotted the opportunity to potentially obtain additional benefits from it …. Specifically, this coordination consisted in a practice called “standing down”. (288) The occasional standing down practice concerned instances in which traders refrained from trading as they otherwise had planned to undertake during the time of the fix on account of another trader’s announced position or trading activity. The modification of some participating traders’ behaviour during this time reduced the risk that a transaction by the participating trader would not achieve the desired outcome and avoided simultaneous trading in opposite directions.” “(342) The extensive and recurrent exchanges of information facilitated occasional instances of coordination among the traders in the form of standing down with a view to securing commercial benefits for the undertakings concerned, as described in Section 4.1.3.2.”
“As regards the content of the conduct, the participating traders engaged in recurrent and extensive exchanges of information through which they revealed to each other certain current or forward-looking commercially sensitive information about confidential aspects of their market conduct. These exchanges included: (a) Information on outstanding customers’ orders …. These exchanges applied to: (i) customers’ conditional orders, (ii) WMR or ECB’s fix positions and (iii) customers’ immediate orders. (i) The exchange of information on customers’ conditional orders … increased market transparency for the chatroom members and thus enabled them to gain a better understanding of the direction towards which the market might move, when certain pricing levels were reached. In this respect, the recurrent update of knowledge of customers’ confidential conditional orders placed with the participating traders was capable of influencing the participating undertakings’ trading strategy and of increasing their ability to exploit that level of insider information in their trading activities for their own benefit. (ii) Regarding the information exchanges revealing orders for the fix … the participating traders had effective access to more specific and timely information about competitor positions than they would otherwise have had absent the exchanges. This conferred on them the ability to predict with a greater degree of confidence the direction in which the market may move at the time of the fix. The participating undertakings could take advantage of this improved degree of confidence about the market trends at or around the fix to adjust their trading strategy (for example, by trading at or in advance of the fix in order to hedge their net client orders, by choosing not to net off or by refraining from trading) and thereby attempt to boost their profits at the expense of other competitors and counterparties who did not have access to the information. (iii) The exchange of current or forward-looking commercially sensitive information related to customers’ immediate orders (such as the size or the direction of specific, non-aggregated orders or the type or name of customer) removed some of the uncertainties that are inherent to Forex trading and increased the level of transparency about the evolution of the involved exchange rates for the participating traders. Some of the exchanges of information … show that the participating traders disclosed information on their clients’ identities when discussing details of their customers’ immediate orders. The clients identified were mostly significant market participants, such as financial institutions whose trading activity is informative (see recital (40)) and, therefore, may anticipate short-term FX movements. Hence, the disclosure of details on such customers’ immediate orders increased the pool of information available to the participating undertakings concerning which way (up or down) currency prices were likely to move … . (b) … the recurrent knowledge update of the open risk positions of participating traders provided them with information which could be, for a window of minutes or until new information superseded it, relevant to their subsequent trading decisions and could enable the participating undertakings to identify opportunities for coordination. In particular, when one trader disclosed an open risk position, the other participating traders would refrain from trading by withholding bids or offers so that the price of the involved currency pair would not move in a direction adverse to the trader with the open risk position. (c) Information on bid-ask spreads quoted for specified currency pairs for certain trade sizes and for certain client types …. As a result of the exchanges on bid-ask spreads, the participating traders could reduce the risk inherent in trading currencies to their benefit, so that with the knowledge acquired from the exchanges with their competitors they could safely offer to their clients the upper range in the market price levels. Even a minor spread difference for large volume transactions, such as the ones the participating undertakings dealt with, could have resulted in large benefits for them to the detriment of their clients. (d) Information on current or planned trading activities …. The cumulative disclosure of other details of participating traders’ current or planned trading activities, or a combination of the topics described above (customer orders and/or open risk position) also removed some of the uncertainties that are inherent in Forex spot trading and increased the level of market transparency. The availability of this information provided the participating undertakings with valuable cumulative insights into current trading patterns of their competitors and comforted them in their risk assessment when developing their own trading strategies.”
“(399) Price and risk management are parameters of competition … that the participating undertakings should have managed autonomously; however, the undertakings that were involved, via the participation of their traders in the chatroom, substituted competition by cooperation amongst them. (a) Regarding price (and bid-ask spreads), the exchanges of information on outstanding customer orders and the cumulative disclosure of other details of current or planned trading activities removed some of the uncertainties that are inherent in Forex spot trading. These exchanges increased the level of transparency about the participating traders’ trading strategies …. The participating traders disclosed in the chatroom information on their outstanding customer orders, such as the identity or type of client, which provided them with an insight into the subsequent movements in the involved exchange rate. As the undertakings’ pricing strategy depends on their expectations of FX rates tendencies, these exchanges informed their pricing behaviour about general pricing trends thereby reducing the risk inherent in pricing currencies (e.g. likely resulting in lower expected losses). The exchanges of information on bid-ask spreads in the chatroom … also provided the participating traders with greater certainty on the prices they were quoting and informed their subsequent trading behaviour concerning spreads. Those exchanges were capable of enabling the participating traders to align their spreads for particular transactions and, thereby, their all-in price offered to a specific client for a particular transaction. Any potential counterparty who was not aware of such exchanges of non-publicly available information on spreads and who might have contacted more than one of the participating traders to get a price on a specific trade, might have received less competitive prices from them. (b) Regarding risk management, … traders are compensated not only for the immediacy of the service they provide but also for assuming the subsequent risk of holding a certain currency in their inventories (the open risk positions). The expertise of FX spot traders resides in their risk management skills and their capacity to reduce their risk of losses. For instance, in this particular case, traders adjusted their position in a currency depending on their expectations on its price evolution …; if a participating undertaking expected a decrease in the market price of a currency and held a long position in it, it reduced its position in order to reduce the risk of making losses linked to a price decrease of the involved currency. The exchanges of information on open risk positions … provided the participating traders with greater certainty on the trading intentions of each other and hence removed some of the uncertainty as to the potential evolution of a specific Forex rate, thereby helping the participating undertakings in the management of their own trading risk. (400) Therefore, the extensive exchanges of current or forward-looking commercially sensitive information … reduced uncertainty between the participating undertakings on their respective trading strategies and of the direction in which the market might move. These exchanges of information allowed the participating undertakings to make their daily risk management decisions comforted by the knowledge of their competitors’ trading behaviour, trading exposures and immediate plans. This could help them to better predict each other’s future conduct in the market and gave them the ability to inform their subsequent trading decisions. The participating undertakings would be in the position to either persevere in their intended course of action comforted in their risk assessment with the information they had, eventually adapting their price to that risk perception, or to change course and trade differently to how they would have traded absent that information. … (401) In conclusion, the continuous exchanges of commercially sensitive information provided the participating undertakings with the opportunity to subtract themselves from competition on the merits with regard to key parameters of competition (price and risk management). This constant flow of information exchanges within the chatroom also entailed an asymmetry of information between the participating undertakings and their non-participating competitors to the advantage of the former, since only the participating traders were continuously aware of their trading behaviours, trading exposures and immediate plans and this knowledge provided them more comfort when adopting their market behaviour.”
“(447) … an overall assessment of the content of the conduct, in the light of the aims objectively pursued and the economic and legal context in which the conduct took place … reveals a sufficient degree of harm to competition to conclude that it can be qualified as a restriction of competition by object.”
“(473) Moreover, the continuous exchanges within the STG Lads chatroom significantly reduced normal market uncertainties to the advantage of the participating undertakings compared to other market participants. (a) Regarding the exchanges revealing outstanding customers’ orders (conditional orders, orders for the fix and immediate orders) … and current or planned trading activities … the Commission only retains information exchanges where traders revealed pieces of confidential information on specific ongoing or immediately executable transactions that were not justified for the purpose of exploring trading or actually trading with each other as counterparties … . Through these information exchanges, the participating undertakings provided each other with an insight on their current or forthcoming behaviour on the market (timing, pricing, trade size, etc.) reducing the uncertainty that is inherent to a competitive scenario, where the parties must determine autonomously their pricing and risk strategy … . (b) Through the exchanges revealing their quoted or intended bid-ask spreads … the participating traders who were competitors in the market advised each other on strategies of pricing to quote to their clients. They disclosed the actual spread they quoted for specific currency pairs, trade sizes and client types, which may also affect the overall price paid by customers for trading currencies. In these exchanges, a participating trader consulted his competitors in the chatroom on the most convenient spread for a specific trade before offering a quote to his clients. The exchanges of information on bid-ask spreads in the chatroom increased transparency and reduced market uncertainties for the participating traders regarding prices. These exchanges enabled the participating traders to obtain greater certainty on the spreads they were quoting and might have informed their subsequent trading behaviour concerning spreads. The information exchanges may also have allowed them to align their spreads for particular transactions and thereby their all-in price offered to a specific client for a particular transaction. A customer who is not aware of such exchanges of non-publicly available information on spreads may have contacted more than one of the parties’ sales desks to get a price on a specific trade and may have received less competitive prices from them due to the exchanges of information on bid-ask spreads between the participating traders… Moreover, contrary to Credit Suisse’s claims, there is evidence showing that the intention of the participating undertakings with the exchanges on bid-ask spreads was to be able to offer the widest (most expensive for the client) spread possible to the clients, within the constraints they jointly perceived were imposed by the wider market. In an extract of17 February 2012 not contested by Credit Suisse, [employee of Credit Suisse] asks what current spreads the other traders are offering for a volume of 50 million (presumably, EUR/USD). [Employee of non-addressee] answers “5 unfortunately”, and then adds “6 if you are lucky”, thereby showing that the intent of the exchanges was to enable the traders to identify, and offer, the widest spread possible given the market conditions at that time. As a result of the exchanges of information …, the traders’ uncertainty was reduced and they could ‘safely’ offer to their clients the upper end of wider spreads. Even a minor spread difference for large volume transactions, as the ones the participating traders dealt with, might have resulted in large benefits for the participating traders to the detriment of their clients.”
“63. Mr Evans proposes to exclude benchmark transactions, limit orders and resting orders from the scope of the proposed action. However, contrary to Mr Knight’s evidence, the Respondents do not hold data which enables these transactions to be reliably identified across the claims period. As Judge Schofield held in the US certification ruling: “… individualized inquiries would be required to identify and exclude certain types of trades. “Benchmark trades” are trades that were entered into at a benchmark price. Such trades are expressly excluded from both the OTC Class and Exchange Class. “Resting orders” are orders that are placed in advance, directing the bank to execute a trade if and when the market price for a particular currency pair hits a specified level. Resting orders would not be impacted by a conspiracy to widen spreads in the spot market, because clients do not “pay the spread” when they place resting orders. Because benchmark trades and resting orders cannot serve as a basis for liability in this case, the type of each transaction executed by class members is highly material to their claims. Identifying and excluding benchmark trades and resting orders cannot be accomplished through generalized proof. Rather, a fact-intensive individualized inquiry would be required -- for example, a review of the relevant communications between class members and Defendants. This would be an enormous undertaking; Plaintiffs have identified tens of thousands of OTC class members, and each class member, under the OTC Class definition, entered into at least ten FX transactions” 64. Judge Schofield went on to record that it was the Plaintiffs’ own evidence that the Defendants did not “maintain records regarding certain trade characteristics”
“An appeal lies to the appropriate court on a point of law arising from a decision of the Tribunal in proceedings under section 47A or in collective proceedings—(a) as to the award of damages or other sum (other than a decision on costs or expenses) …”
“…it may be that the facts found are such that no person acting judicially and properly instructed as to the relevant law could have come to the determination under appeal. In those circumstances, too, the court must intervene. It has no option but to assume that there has been some misconception of the law and that, this has been responsible for the determination. So there, too, there has been error in point of law.”
“56. Where the challenge is directed at a decision about facts prima facie this will not be a matter falling within the jurisdiction of the Court of Appeal because it will be the outcome of an exercise of judgment and not an error of law. Nonetheless, the exercise of judgment over facts can on occasion amount to an error of law, for example where the decision in dispute is outside the (generous) bounds of that which the decision maker (here the CAT) could properly and reasonably make. If for instance the CAT were wrongly to place the decimal point one place to the right in an equation relevant to the computation of aggregate damages (thereby magnifying the damages to be paid by 1000% - damages of£1m might become£10m ), then the Court might, for example, treat this for instance as the CAT taking into account an irrelevant consideration and correct it. We consider that issues such as this will very much be the exception and not the rule. 57. On the other hand when it comes to the weighing up of the various factors relevant to the choice of opt-out or opt-in this is essentially an exercise of judgment over facts and evidence by an expert, specialist, body, that will over time accrue an increasing well of experience in how to handle these complex cases. The appellate courts recognise that the case management decisions of the CAT are exercises in pragmatism and that undue formalism and precision are not required: See the summary of the case law in NTN v Stellantis NV and others[2022] EWCA Civ 16 at paragraphs [24] - [29]. These considerations broaden the Tribunal’s margin of discretion or judgment. This Court should not interfere simply because it might, for the sake of argument, have drawn a different conclusion from the weighing exercise. We would expect that most opt-out/opt-in decisions will involve a weighing exercise of this nature.”
“a decision in collective proceedings as to the award of damages”
“24. … was not… intended to limit the disappointed party's right of appeal to decisions of the tribunal either awarding or refusing an award of damages following a full hearing… it is difficult to believe that Parliament intended an unsuccessful claimant to be able to appeal against the dismissal of his claim after a full hearing but not to do so against its dismissal [at an interlocutory stage].”
“… a case where no damages will arise at all because of an interlocutory decision will be a decision as to the award of damages” (paragraph [15]). In pragmatic terms the CAT observed (paragraph [18]): “Parties before the Tribunal can proceed on the basis that, assuming a point of law arises, contested interlocutory decisions, even of a contested case management nature, can be presumed, for the purposes of permission to appeal applications, to meet the requirement that they affect the final substantive outcome in terms of the level of damages awarded.”
“Judicial review should only be used where no adequate alternative remedy, such as a right of appeal, is available. Even then, judicial review may not be appropriate in every instance.”
“The fact that data is likely to turn out to be incomplete and difficult to interpret, and that its assembly may involve burdensome and expensive processes of disclosure are not good reasons for a court or tribunal refusing a trial to an individual or to a large class who have a reasonable prospect of showing they have suffered some loss from an already established breach of statutory duty. In the context of suitability for collective proceedings or aggregate damages, it is no answer to say that members of the class can bring individual claims. They would face the same forensic difficulties in establishing merchant pass-on, and insuperable funding obstacles on their own, litigating for small sums for which the cost of recovery would be disproportionately large.”
“230. An important aspect of markets and competition is how undertakings in a market respond to an increase in the costs of doing business. The legal analysis to date has focused on the recovery of unlawfully caused costs. The four principal options are set out at paragraph 228 above, but these options are likely to operate not singly, but in parallel, and we would be surprised if these were the only options open to the undertaking: there will at least be variants on these themes. It must also be noted that the picture becomes even more complex when it is borne in mind that an undertaking is unlikely to react to an unavoidable increase in costs immediately. In the short term, an undertaking may well bear an unavoidable increase in costs by making less profit (or incurring a loss or a greater loss), but that is most unlikely to be the undertaking’s response in the medium or the long term. In the medium or long term, the undertaking will seek to maximise its profit and to cover its costs one way or the other. 231. There is, thus, to the economist, a broad similarity between a cost that is passed from undertaking to undertaking (like the unlawfully excessive MIF) and a cost that represents an increase in the cost of doing business (like the cost of doing business in a market rendered less efficient by unlawful information exchanges). The way in which these costs arise is self-evidently different: but the way they are recovered by the undertaking may in essence be the same. We have no difficulty in economic theory postulating that an increase in costs may – one way or the other – result in an increase in prices. From this, it follows that we have no difficulty in economic theory postulating that a specific and unlawful cost (whether that be an excessive MIF or an unlawful information exchange) may be passed on or transmitted to the market in the form of increased prices. To be even more specific, we have no difficulty (as a matter of theory) in postulating or accepting that information asymmetries in the FX markets (including, but not limited to, unlawful information asymmetries) might generate increased costs to large numbers of participants in those markets, resulting in increased spreads charged to market counterparties. 232. But economic theory does not, in and of itself, constitute an arguable legal claim. Put as we have put it, to the lawyer it amounts to no more than assertion, bereft of the particularity that is required in order to render the claim triable. Economic theory does not automatically or easily translate into a legal claim. A civil action requires, amongst other things: (1) Identified or identifiable claimants. (2) Identified or identifiable defendants. (3) Some kind of actionable and identifiable harm, caused by the defendants to the claimants. 233. The economic theory of passed on or transmitted costs provides the answer to none of these questions. An essential problem in articulating market-wide claims of harm, which both the O’Higgins Application and the Evans Application need to have grappled with, lies in translating this possible or theoretical phenomenon into a series of averments capable of being tried in a court.”
“234. Before we turn to the specific issues that arise out of the O’Higgins and Evans Applications, it is important that we make clear that these courts are open to claims of market-wide harm, and have a number of tools to deploy in order to enable such a claim to be framed. As to this: (1) The courts in this jurisdiction are very much alive to the concept of “effectiveness”
“236. We have therefore reviewed the cases articulated by the Applicants in the widest sense, so as to understand the cases they are making. Earlier drafts of this Judgment went to some length in considering all of the pleadings, including those submitted in response to our letter of20 July 2021 , as well as the expert evidence submitted by each Applicant. It is, however, unnecessary to set out the content of these materials in any greater detail than we have done. On the basis of all the materials we have considered, including in particular the expert evidence, we are prepared to proceed on the basis that the claims are theoretically plausible. 237. However, we are satisfied that the facts and matters necessary to support a proper pleading have not been articulated in the pleadings as they stand in either the O’Higgins Application or the Evans Application. We are satisfied that this is not because of a failure to translate specific details that are contained in the expert reports into a legally framed document. Although the expert reports are detailed, these details amount to no more than a detailed expansion of a theoretical position. Our conclusion is that they do not contain material sufficient to support a proper plea of causation, loss and damage.”
“(5) At best, this plea is one where there is the hope – framed as an expectation – that something will “come out in the wash”, probably in the form of the regression analyses that can be conducted in relation to the data that would – if these actions were to proceed – be provided on disclosure, so as to enable a theoretical position to be fleshed out by some kind of freshly articulated case. (6) Allowing actions to proceed on a “wing and a prayer” is precisely what Nomura enjoins. Defective claims cannot be allowed to proceed in the expectation – even the confident expectation – that the deficiency will be made good by disclosure. The answer to this sort of problem is pre-action disclosure – and no application along these lines has even been suggested by the O’Higgins PCR.”
“(7) Nor are we confident that the regression analysis would demonstrate the kind of correlation between the infringements found in the Decisions and the movements in the market (in particular, the widening and narrowing of spreads) so as, in and of itself, to make good the causative link between the infringements and the losses alleged. That is because of the multitude of other factors that may affect the level of spreads in the FX market, which will be hard to control for. We make this point about the utility of statistical analysis simply because it underlines the importance, and essential correctness, of cases like Nomura. If there is an arguable statistical case on causation, it should be pleaded first, with disclosure following.”
“240. The question is whether the level of generality or abstraction contained in the O’Higgins and Evans pleadings is sufficient to amount to “reasonable grounds for making the claim” within the meaning of rule 41(1)(b) of the Tribunal Rules. The short answer to this question is that we have no doubt that this test is not met and that both Applications could be struck out under this rule. We are acutely conscious that translating a phenomenon that may well commend itself to economic theory into an arguable claim is likely to be extraordinarily difficult. We are also well aware of the competing values of (i) the need for clarity and certainty in regard to a case being put forward and (ii) the principle of effectiveness. As the Supreme Court has noted in Sainsbury’s (SC),[i]t 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.”
“We want to be very clear that we are not making any kind of determination on the merits. What we are articulating is a deficiency in how the case is pleaded. We are not saying that there is no causal link between infringement and loss. What we are saying is that we do not understand from the pleaded case how this link between infringement and causation arises. We could speculate as to how the case might be put. Or we could – using the economic expertise of the panel – try to “fill in the blanks”
“241. Equally, we are in no doubt that this is a jurisdiction that we should not – at this stage – exercise: (1) The reason we are in no doubt that these Applications could be struck out is because, as presently framed, we simply do not understand how they could properly be tried. The pleadings give no idea as to how the losses claimed have been suffered, and we do not consider that this Tribunal can effectively manage these cases to trial or at trial; nor do we consider that the Respondents can properly defend themselves in circumstances where – although the nature of the claims are understood at a theoretical level – there is, in reality, no pleaded case on causation. (2) However, as we have noted on a number of occasions, these Applications raise novel and difficult questions. In particular, “market harm” cases – where the class sought to be represented consists of participants in a market in which anti-competitive infringements took place – are novel. We accept that this is a new and (in pleading terms) untested area. It is right that the strike-out jurisdiction not be exercised in an area of law that is subject to some uncertainty and is in a state of on-going development, and not without the Applicants having the opportunity to address the concerns we have articulated much more clearly in this Judgment than we did during the hearing. For what we hope are understandable reasons, our attempts to understand the claims advanced by the Applicants have caused developments in our thinking, and it is entirely fair to say that there has not been an opportunity, on the part of the Applicants, to address our final thinking on the question of pleading. (3) Accordingly, we consider that, at this juncture, it would be inappropriate to strike out either Application. Rather, both Applicants need to be (and now are) on notice that absent significant amendment and revision a future strike-out application may very well be on the cards.”
“(3) In determining whether collective proceedings should be opt-in or opt-out proceedings, the Tribunal may take into account all matters it thinks fit, including the following matters additional to those set out in paragraph (2) - (a) the strength of the claims; and (b) whether it is practicable for the proceedings to be brought as opt-in collective proceedings, having regard to all the circumstances, including the estimated amount of damages that individual class members may recover.”
“The Act reflects an increasing recognition of the important advantages that the class action offers as a procedural tool … class actions provide three important advantages over a multiplicity of individual suits. First, by aggregating similar individual actions, class actions serve judicial economy by avoiding unnecessary duplication in fact-finding and legal analysis. Second, by distributing fixed litigation costs amongst a large number of class members, class actions improve access to justice by making economical the prosecution of claims that any one class member would find too costly to prosecute on his or her own. Third, class actions serve efficiency and justice by ensuring that actual and potential wrongdoers modify their behaviour to take full account of the harm they are causing, or might cause, to the public. In proposing that Ontario adopt class action legislation, the Ontario Law Reform Commission identified each of these advantages … In my view, it is essential therefore that courts not take an overly restrictive approach to the legislation, but rather interpret the Act in a way that gives full effect to the benefits foreseen by the drafters.”
“29. Pulling the threads together, the principal object of the collective action regime is to facilitate access to justice for those (in particular consumers) who would otherwise not be able to access legal redress. Embraced within this broad description is the proposition that the scheme exists to facilitate the vindication but not the impeding of rights. Also included is the proposition that a scheme which facilitates access to redress will increase ex ante incentives of those subject to the law to secure early compliance; prevention being better than cure. Finally, emphasis is laid on the benefits to judicial efficiency brought about by the ability to aggregate claims.”
“39. … the foundation on which the rule must now rest is that findings of fact made by another decision maker are not to be admitted in a subsequent trial because the decision at that trial is to be made by the judge appointed to hear it (“the trial judge”), and not another. The trial judge must decide the case for himself on the evidence that he receives, and in the light of the submissions on that evidence made to him. To admit evidence of the findings of fact of another person, however distinguished, and however thorough and competent his examination of the issues may have been, risks the decision being made, at least in part, on evidence other than that which the trial judge has heard and in reliance on the opinion of someone who is neither the relevant decision maker nor an expert in any relevant discipline, of which decision making is not one. The opinion of someone who is not the trial judge is, therefore, as a matter of law, irrelevant and not one to which he ought to have regard. 40. In essence, as the judge rightly said, the foundation of the rule must now be the preservation of the fairness of a trial in which the decision is entrusted to the trial judge alone.”
“16. During the course of the US Proceedings, the US defendants have produced very large quantities of information and data, by way of discovery. Specifically, I understand that, as at12 January 2018 , the following had been disclosed by the US defendants: a. Documents: The US defendants produced approximately 1.6 million documents, amounting to more than 16.5 million printable pages. b. Transaction data: Additionally, the US defendants produced over 7,000 files of transaction data from over 30 different trading systems, amounting to approximately 10 billion rows, occupying 4 terabytes. c. Third party transaction data: Further, Lead Counsel also obtained – pursuant to subpoenas – an additional 2.5 terabytes of data from non-party sources, including Hotspot, Reuters Matching, EBS, and WM/Reuters. 17. My colleagues at SSAAL believe the transaction database to be one of the largest ever assembled for use in a single piece of litigation. To produce this database, extensive work was conducted with Velador including data ‘cleaning’ (as the US defendants produced the data unfiltered) and data ‘normalization’ (as the data came from so many sources, it had to be put into uniform data extracts). In connection with the data cleaning and normalization processes, Velador had to develop over 1,000 scripts of code. 18. A large proportion of these documents and databases obtained in the US and referred to above constitutes US Confidential Material. The Proposed Representative, the legal and expert teams and I have not seen any such US Confidential Material, but I can confirm from my review of the publicly available sources and from conversations with SSAAL partners that the US Confidential Material (together with other information) has been used to form the basis of the expert work in the US Proceedings and to implement the US Plan of Distribution for Option 1 Claims in the US Settlement. 19. I have no reason to believe that, following disclosure in these proceedings, the legal and expert teams retained by the Proposed Representative will be unable to similarly process the disclosed materials for use in damages quantification and, ultimately, distribution of damages.”
“428. … However, whilst recognising those very considerable concerns, although we have heard extensively from experts as to how they would approach that exercise, it has not yet been done, at least in evidence submitted to us (there are suggestions that it has been done in other related cases), and we have not yet heard other factual witness evidence that there might be relevant to the PCRs’ case. Accordingly, there are limitations as to the weight that can be given to the Strength criterion at this stage of the case.”
“Nor can it be said that the putative class members will be ignorant of these potential claims. To the contrary, the efforts of Hausfeld – contacting 321 firms – evidence that it appears not to be ignorance that is preventing a rush to join the proceedings. Rather, there appears to be a deliberate decision not to participate. We are conscious that we have not heard directly from any members of the putative classes. It may be that putative class members are so unimpressed with the claims that they do not wish to be associated with the actions; or it may be that those sufficiently interested have joined the Allianz proceedings; or it may be that the class members are so apprehensive about joining the proceedings because of the potential reaction of the Respondents that they are deterred from doing so; or it may be that decision-makers simply cannot be bothered to consider whether it is in their firms’ interests to opt in or not. We have no material on which to base so specific a conclusion. We can only say that we can see no reason why it is not practicable for the putative class to join on an opt-in basis, given all the circumstances and in particular given the general sophistication of the putative class, the class knowledge, and the potential size of claim. The inference (and we consider it a strong one) is that potential class members are not opting in because they do not want to, and not because opt-in proceedings are not practicable.”
“Following this substantial exercise, and after having contacted approximately 321 organisations, Hausfeld were instructed by 14 clients to provide legal and strategic advice in connection with potential claims in respect of FX misconduct. However, after investigation, it transpired that their combined claims were not of sufficient size to bring a viable group claim bearing in mind the costs of litigating complex claims against several major banks. Many of the individual claims were estimated to be in the low (single digit) millions or less. This made it practically impossible to put in place funding, given that the likely budget required to pursue the claims (including the costs of acquiring adverse costs insurance) was likely to be similar or even exceed the total estimated damages for the group. Unwillingness of potential claimants to commit to opt-in proceedings As is clear from the above, despite the significant time and effort invested in identifying and approaching potential claimants, only a fraction of those we approached agreed to be retained for the purpose of pursuing claims. Based on my discussions with many of these potential clients, I believe there were four main reasons for their reluctance to participate: a. A key concern expressed by many of the organisations we contacted was that they did not want to embark on a legal fight with major banks for what seemed to them to be a modest to small level of potential damages (in most cases single digit millions or less). In particular, many of the organisations maintained ongoing relationships with those banks – including corporates and hedge funds and asset managers who worked in the finance sector – and did not want to take any steps that might cause conflict in those relationships. b. Several organisations, including sophisticated financial institutions, expressed a reluctance to invest time navigating their internal approval processes, which would require obtaining approval from senior managers, considering funding proposals and documents, identifying, retrieving and reviewing the relevant documents and determining whether the potential benefits of a possible damages payment outweighed the downside of allocating their internal resources for this purpose. I was also informed in many of these discussions that committing to litigation could also trigger reporting considerations within many organisations, and many of them were reluctant to draw attention to this issue internally. c. Many potential claimants expressed concern that participating in litigation would require them to share confidential business information with the other claimants, the defendant banks and/or more widely. Although it is possible to obtain protective court orders, such as a confidentiality ring, to protect against wider disclosure of confidential information, I was not able to give potential claimants a watertight guarantee that these measures would be put in place, because this would ultimately be a matter for the court to decide. d. The process of engaging a client itself often proved to be a practical deterrent for potential clients. Many of the 321 organisations and individuals we spoke to told us that gathering historic FX transaction records, along with any other relevant evidence to support their claim, would require a significant amount of internal resource. Several told us that they no longer retained the relevant records or only had partial records. For many, this was an unattractive prospect in circumstances where, at that stage, the outcome and quantum of the potential claims were uncertain.”
“73. In our judgment, and in line with the observations expressed in Lloyd and in Merricks, the CAT was entitled to conclude that if an opt-in was ordered the take-up could be very limited. Indeed, this seems to us to be a more or less obvious conclusion to arrive at on the facts. Both judgments demonstrate that the practicalities of collectively organised litigation might favour an opt-out solution where there are large numbers of potentially affected parties and relatively small sums at stake which might otherwise deter the take up of opt-in proceedings. 74. The ability of a claimant to convert identifiable contacts into litigants is hence an important factor which goes well beyond issues of identifiability and contactability. The Tribunal examined relevant factors such as size of class, the scale of a possible award and the impact of these on funding as important considerations. These might be sufficient, by themselves, to justify an opt-out decision. The CAT also considered the more subjective characteristics of the class including age profile, social class and technical ability. These are case specific factors which can serve to reinforce an opt-out decision. The CAT came to specialist conclusions which lay squarely within its broad margin of judgement. There is in our judgment no basis in law upon which this court can properly interfere.”
“83. … The concept of “practicability” is not defined in the CA 1998 or the Rules and it is not “the” test but simply “a” matter the Tribunal is entitled to take into account... . Ms Ford QC for BT did not demur from this analysis of legislative language. She did argue that practicability meant “doability”; if it can be done then it is practicable and if it is therefore practicable then it pointed powerfully in favour of an opt-in process. With respect we do not agree. Practicability includes being “doable” but goes further; it requires the court to ask whether it is not only “doable” but also reasonable, proportionate, expedient, sensible, cost effective, efficient etc, to do it. There are many things that might be doable but where to do them would amount to a poor exercise of judgment.”
“… it is clear that these are – on average – not insignificant individual claims, and that large institutions would have the potential to claim really quite large sums of money.”
“… whole classes of consumers to vindicate their right to compensation and the large cost of the necessary litigation to be funded before an expert tribunal…”
“Pre-existing body. Neither the O’Higgins PCR nor the Evans PCR is a “pre-existing” body: … We consider that this is a factor pointing away from certifying on an opt-out basis. If we had before us a trade association, whose established purpose it was to represent a specific class that had suffered alleged harm, but (for good reason) found it difficult to corral members of the class into opting in, that would be a factor in favour of certifying on an opt-out basis. It seems to us that the fact that both PCRs in this case have come forward, not at the behest of the class, but at the behest of the lawyers they now instruct (who have themselves failed to “build a book”) is an indicator against certifying on an opt-out basis.”
“(i) Opt-in collective proceedings will have some – even if limited – involvement of the class, who might be expected to have views about any proposed settlement.” (ii) In the case of opt-out collective proceedings, the only safeguard is the scrutiny of the Tribunal. Of course, the Tribunal will discharge its obligations conscientiously and carefully, but the reality of this case is that quantum is hugely uncertain and – in any application for approval of the settlement – the Tribunal will be faced by both the class representative and the Respondents saying “this outcome is better than litigating to trial and judgment.” (iii) The level of funding does, therefore, slightly inclines us against opt-out collective proceedings for this reason, but the point is, we consider, a marginal but not immaterial one, of relatively little weight. We take it into account.”
“… The risk of overlapping claims tells differently as between opt-in and opt-out collective actions. If there is a risk of overlap – and it is, in this case, very difficult to tell, which is part of the problem – then it is better to ensure that class members take the conscious decision to opt in, rather than being obliged to consider opting out. Furthermore, the Allianz proceedings are an indicator that there is an appetite to bring this sort of claim, albeit as an adjunct to instances where individuated or direct harm (through entering into a specific FX transaction at the wrong rate) has also been caused. This does, however, support (albeit marginally) the sense that the putative class members are choosing not to involve themselves in the proceedings the Applicants wish to bring on their behalf. We return to this point in the next sub-paragraph (but will avoid “double counting”).”
“435. In creating an opt-in class, it would be necessary to establish a critical mass of core claimants to make such a claim viable as an action. The (formidable) costs of bringing this action are not materially dependent on the size of the class. However, the total size of the damages claim is critical because it supports the funding to pursue the claim. That is a function of the number of class members and the size of their claims. In essence, that total likely damages claim has to be large enough for the economics of bringing the claim, with its costs and risks, to be rational. Once sufficient (presumably larger) claimants opt in so that point is reached, and a claim is viable and proceeds, there is then a separate issue of the extent to which it is possible to contact other PCMs to give them a fair opportunity to join the class. In this sense, practicability has two elements: (i) would a claim happen at all; and (ii) if it did, would it be practicable to bring the claim to the attention of the remaining PCMs to give them a fair opportunity to consider whether they should opt-in.”
“447. The extent to which an opt-in CPO is practicable is not a binary issue but a matter of degree and to be assessed in particularly uncertain circumstances (not least since there is limited current experience in the creation of an opt-in CPO and none, that we are aware of, in analogous circumstances). This is, not least, because (a) a degree of impracticability can be overcome by the application of greater effort and resources and (b) the concept of an opt-in CPO that is practicable must include some assessment of how widely it meets the interests of the PCMs as a whole (rather than, say, just a core element). 448. Logically, however, the less practicable an opt-in CPO would be, the more the discretion should be exercised in favour of opt-out. In the limiting, perhaps theoretical, case where it is clear that an opt-in CPO is actually impracticable (in the sense that it cannot happen), it seems that ought to be an exclusionary test for the opt-in approach. It can make little sense for the Tribunal to order a CPO (which, by definition, has already passed the Authorisation Condition and the Eligibility Condition to be awarded a CPO) on a procedural basis which means that it will not happen.”
“449. In this case, the only evidence that we have is from the PCRs. It does not formally establish that an opt-in CPO is formally impracticable (impossible), it does establish (on a basis unchallenged by other evidence and certainly unrebutted) that, at the least, it is very unlikely that an opt-in CPO would proceed at all and certainly that a large percentage of the 40,000 UK based PCMs would opt in. In my opinion, this is a factor that weighs heavily in favour of an opt-out CPO. That reflects both the logic of the position and the overriding objective that we are balancing the respective interest of the PCMs, the Respondents and the administration of justice. I cannot see how we respect the interests of the PCMs and the administration of justice by adopting a process that we can only conclude is very likely not viable at all and where, even if it were to occur, many PCMs would never opt in, and, in many cases, would never have the opportunity to opt in.”
“389. We consider that if we were minded to certify on an opt-out basis, the carriage of the proceedings should be granted to the Evans PCR and not to the O’Higgins PCR. In other words, we would – on this basis – be minded to grant the Application of the Evans PCR and stay the Application of the O’Higgins PCR. We have reached this conclusion for the following reasons. (1) In many respects the Applications are (entirely unsurprisingly) very similar. In each case, we have the highest respect for each PCR and for the legal teams and experts they have instructed. Equally, the faults we have found (in particular an overspend on pre-certification costs and a shortfall in funding) apply similarly to both Applications. The question of carriage is a very marginal decision. (2) Although it is correct to say that the O’Higgins PCR was “first to file” in comparison with the Evans PCR, for the reasons we have given, we do not consider this to be a point in favour of the O’Higgins PCR. (3) The O’Higgins PCR undoubtedly has an advantage in terms of the extent of ATE insurance, which is a material point, but of limited weight given the costs that the Respondents are likely to incur. We consider that the ability of a successful defendant to recover taxed/assessed costs is important, but it is only one of many factors. Neither the O’Higgins PCR nor the Evans PCR was, in our judgment, providing security (in the form of ATE insurance) coming close to the taxed/assessed costs that the Respondents would be entitled to recover, assuming they were to succeed in their defence at trial. The£10 million -odd difference in ATE insurance cover between the rival PCRs is less than£2 million per Respondent, and does not amount to a particularly material difference. (4) We consider the claims of the Evans PCR to be better thought through. We stress, however, that we are drawing a distinction between two cases which have both only just survived strike-out on this occasion. In respect of each, we have very serious concerns about the manner in which the claims put forward have been articulated. With that very substantial proviso, we have concluded that, viewed side-by-side on a relative basis, the claims articulated by the Evans PCR have been better thought through and represent, to our mind, a marginally better attempt at capturing an elusive loss than that attempted by the O’Higgins PCR. (5) We stress that in reaching this conclusion, we are in no sense seeking to apply any kind of merits test. We are simply gauging the relative “strength” of the two claims in the sense described in paragraphs 98 to 118 above. To put the same point differently, we consider that the essential question to ask is which Applicant will better serve the interests of the victims that comprise the class(es) for whom the PCRs wish to act. Although we consider that the real answer to this question is “Neither”, if required to reach a conclusion, we conclude in favour of the Evans PCR. 390. Accordingly, if we were required to do so, we would decide the Carriage Issue in favour of the Evans PCR, without taking into account the new material introduced by the Evans PCR after the oral hearings had concluded. It is to that new material that we now turn.”
“406. It follows that the objection on admissibility must be rejected, and that we are obliged not to disregard this material, but instead to take it into account. However, the extent to which we take it into account must be constrained so as to avoid a “gaming” of this jurisdiction. We do not want to encourage late changes to the basis upon which a PCR proposes to represent a class. Accordingly, it seems to us that where an applicant, as here, makes a late improved offering, which has the effect of improving that applicant’s offer as against that of a rival applicant, such that the outcome of the carriage dispute changes in the former’s favour, then the rival applicant who would otherwise have been awarded carriage of the litigation should be given the opportunity of matching or beating the improved offer. If that occurs, it is the rival who is awarded carriage of the litigation.”
“The fact is that both PCRs consider that they are best suited to represent the classes they wish to represent, and a responsible PCR will – we have no doubt – keep the quality of its offering under constant review.”
“15 General jurisdiction of Court of Appeal. (1) The Court of Appeal shall be a superior court of record. (2) Subject to the provisions of this Act, there shall be exercisable by the Court of Appeal— (a) all such jurisdiction (whether civil or criminal) as is conferred on it by this or any other Act; and (b) all such other jurisdiction (whether civil or criminal) as was exercisable by it immediately before the commencement of this Act. (3) For all purposes of or incidental to — (a) the hearing and determination of any appeal to the civil division of the Court of Appeal; and (b) the amendment, execution and enforcement of any judgment or order made on such an appeal, the Court of Appeal shall have all the authority and jurisdiction of the court or tribunal from which the appeal was brought. (4) It is hereby declared that any provision in this or any other Act which authorises or requires the taking of any steps for the execution or enforcement of a judgment or order of the High Court applies in relation to a judgment or order of the civil division of the Court of Appeal as it applies in relation to a judgment or order of the High Court.”