CN05 - Out of time - 480m follow-on damages claim against smart card chip cartelists is time-barred

The English High Court has ruled that, on the facts of the case, claimants Gemalto had sufficient information about the smart card chips cartel to support a reasonable claim for damages at the point at which the European Commission issued its statement of objections to defendants Infineon and Renesas (rather than upon the issuance of the Commission's infringement decision). As such, it held that Gemalto's claim for follow-on damages was filed more than six years after the date at which the cause of action accrued pursuant to the 'deliberate concealment' rule in section 32(1)(b) of the Limitation Act 1980.  

Key takeaways

• Potential claimants cannot assume that the limitation period for bringing a claim for damages arising from anti-competitive behaviour will begin once a final decision is issued.
• Potential claimants should consider carefully the point at which they have sufficient material at their disposal to support a reasonable belief in the facts giving rise to their cause of action.

Background

On 3 September 2014, the Commission announced it had fined Infineon and Renesas, along with subsidiaries of Philips and Samsung, €138m for co-ordinating their pricing behaviour and exchanging competitively sensitive information in relation to the sale of smart card chips.

In 2019, digital security company and smart card provider Gemalto filed a €480m claim for damages arising from the cartel behaviour. The defendants argued that, by this time, the limitation period for claiming such damages had already expired.

The High Court held a preliminary issue hearing in January 2022 to ascertain whether this was the case. 

Limitation period

Counsel for Gemalto argued that the 6 year limitation period only began once the Commission adopted its infringement decision. They relied on the 'deliberate concealment' rule under section 32(1)(b) of the Limitation Act 1980, which provides that where a fact relevant to a claimant's cause of action has been deliberately concealed by a defendant, the limitation period does not run until the claimant has or could with reasonable diligence have discovered the concealment.

By mid-2013, the Commission had already published various press releases in relation to its investigation, and had issued its statement of objections to the cartelists. Further, the claimant companies themselves had received two requests for information (RFIs) from the Commission, which identified the defendants and the suspected cartel period. 

Bacon J ruled that, on the basis of these documents, Gemalto had acquired sufficient knowledge of the anti-competitive behaviour to reasonably bring a claim from at least around the end of April 2013, following the Commission's press release announcing the statement of objections. 

It should be noted that Bacon J emphasised that the point at which a claimant had sufficient information to support a reasonable belief as to the facts giving rise to their cause of action was a fact-sensitive question that turns on circumstances of each individual case. 

Conclusion

The High Court's ruling brings further clarity as to how the 'deliberate concealment' rule is likely to be applied in follow-on damages cases arising from Commission cartel decisions. It adds to the growing body of case law cautioning claimants against an assumption that time only starts running following an infringement decision. 

However, Bacon J's reminder of the fact-sensitivity of this question should not be understated. In particular, the fact that the claimant in this case was itself a recipient of RFIs as part of the Commission's investigation is likely to have been a relevant factor. 

With thanks to Imogen Chitty of Ashurst for her contribution.