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Football Shirt Case Settles
Which? have announced today the settlement of the so called Football Shirt case with JJB Sports plc. For the first time ever, consumers in the UK will be able to recover damages from a company found guilty of participating in a cartel. The details of the settlement are available on the Which? website, at http://www.which.co.uk/. Depending on circumstances, anyone who bought from JJB Sports certain England and Manchester United football shirts in certain periods in 2000 and 2001 (and can prove it) can receive a payment, ranging between £20 and £5.

This settlement will likely be seen as a milestone in the development of the UK-own brand of representative actions. It is pivotal in highlighting issues that require attention (mostly at the legislative level), some of which have already been considered by the OFT in their Recommendations on Private Actions (OFT 916resp).

First, the Football Shirts case shows the difficulties arising when a consumer association can only bring so-called "follow-on actions" after a competition law authority has determined companies' liability under the competition rules (and after all appeals have been exhausted). If an action "follows-on" in this way, then it should be easier to bring it, focussing on the extent of damages caused to consumers. Consider, however, that in some cases the competition authorities do not have the resources to investigate a potential breach of the competition rules (a point made by the OFT). Consider also the case of companies which do not appeal a decision (and, more controversially, of those which admit liability under a leniency programme, a point on which the OFT makes very sensible recommendations). Since issuing the claim in the Football Shirt case, the CAT has made it clear (in Emerson v Morgan Crucible) that it ought to be possible, in certain circumstances at least, to start a follow-on action against a company which has been found liable, when this company has not appealed the decision, even though other companies equally found to have breached the competition rules have appealed it. This is a momentous development - if Morgan Crucible had been decided before the Football Shirt claim was issued, perhaps more companies will now be offering money back (not just JJB Sports).

Secondly, there are obvious timing issues in allowing only follow-on actions. Although proof of purchase can take various forms, from showing a bank or credit card statement to producing the shirt itself, it is very likely that only a fraction of the consumers who bought the relevant shirts in certain periods in 2000 and 2001 will be able to prove it in 2008/2009.
Thirdly, the need to bring an action on behalf of named consumers only (an "opt-in" class), as the OFT points out, "gives rise to unnecessary costs and complexities" and to a risk that meritorious cases may not be brought at all, or only on behalf of a small number of consumers. The Football Shirt case provides the perfect example. The time-lag and the need for an opt-in class meant that Which? engaged in time-consuming, possibly expensive, campaigns to find consumers who had bought a football shirt and still possessed the means of proving it. Notwithstanding that media campaign, at the time when the representative action started, there were only "some 130 individual consumers" named. And one shudders to think of the legal costs in proving that those named consumers had a valid claim, if compared to the amount recoverable in damages.

So, this is a step in the direction of more claims for damages by representative bodies, a stated policy goal in much of Europe in recent times. Its lasting impact is likely to lie in having shown clearly for the first time what remains to be done going forward.

For more information please e-mail the EU & Competition Group at EU&Competition@charlesrussell.co.uk

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