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||Neutral Citation Number:  EWHC 741 (Ch)
||Case No: IHC 46/09
IN THE HIGH COURT OF JUSTICE
||Royal Courts of Justice
Strand, London, WC2A 2LL
||8 April 2009
B e f o r e :
THE CHANCELLOR OF THE HIGH COURT
MR I MILLIGAN QC & MR B RAYMENT (instructed by Hausfeld & Co LLP) for the Claimant
MR K MacLEAN QC & MR R O'DONOGHUE (instructed by Slaughter & May) for the Defendant
Hearing date: 1st April 2009
HTML VERSION OF JUDGMENT
Crown Copyright ©
- The claimants import cut flowers from, respectively, Columbia and Kenya. For that purpose they use the air freight services of the defendant British Airways ("BA") and other international airlines. They claim that BA has been party to agreements and concerted practices with Lufthansa, Korean Airlines, Qantas, Japanese Airlines, Air France, Cathay Pacific, KLM, SAS, Martinair and other undertakings directly or indirectly to fix the prices at which air freight services are supplied or to control or share the market for that supply. They contend that the object or effect of such agreements or practices has been to prevent or distort competition within the EEC, EEA Member States or within the UK so as to affect trade between such member states or within the UK. The claimants aver that the agreements and concerted practices were and are secret so that they are unable further to particularise them but that their overall effect was to inflate air freight prices. Accordingly they claim that BA is liable for infringing Article 81(1) EC Treaty, Article 53 EEA Agreement and s.2 Competition Act 1998.
- In September 2008 the claimants instituted proceedings against BA seeking damages for those infringements. In addition, in their particulars of claim they asserted (in the amended form for which they may, in due course, seek permission) that:
"8. The Claimants were direct or indirect purchasers or both of air freight services the prices for which were inflated by one or more of the agreements or concerted practices. As such they are representative of all other direct or indirect purchasers of air freight services the prices for which were so inflated.
9. By virtue of the inflated prices, the direct or indirect purchasers, including the Claimants, have suffered losses, including losses, under one or more of the following three heads:
(1) the inflated element of the price, in so far as it was passed on to them, [and/or]
(2) loss of sales volume in so far as the inflated price was passed on by them to their own buyers, and
(3) loss of sales volumes of other products as a result of brand damage.
10. In the circumstances the Claimants claim on their own behalf and on behalf of all other direct or indirect purchasers of air freight services the prices for which were inflated by the agreements or concerted practices, a declaration that
the Defendant is liable to pay damages are recoverable in principle from the Defendant by to those purchasers in respect of each of those three types of loss."
- The ability of a claimant to sue on behalf of himself and others is regulated by CPR Rule 19.6. That rule provides:
"(1) Where more than one person has the same interest in a claim –
(a) the claim may be begun; or
(b) the court may order that the claim be continued,
by or against one or more of the persons who have the same interest as representatives of any other persons who have that interest.
(2) The court may direct that a person may not act as a representative.
(3) Any party may apply to the court for an order under paragraph (2).
(4) Unless the court otherwise directs any judgment or order given in a claim in which a party is acting as a representative under this rule –
(a) is binding on all persons represented in the claim; but
(b) may only be enforced by or against a person who is not a party to the claim with the permission of the court."
- On 31st October 2008 BA issued the application now before me seeking an order that the purported representative element of the claim be struck out. The grounds for that application are twofold. BA claims, first, that the "other persons" whom the claimants seek to represent do not have "the same interest" so as to fall within sub-rule (1). BA claims, second, that, even if those other persons do have the same interest I should direct, pursuant to sub-rule (2) that the claimants may not act as their representative. I shall, as necessary, deal with those issues in due course. First it is appropriate to set out some of the factual background and refer to the reported cases on which the parties rely.
The factual background
- The application is supported by a witness statement of Mr Swallow, a partner in the firm of solicitors acting for BA. He explains the extent of the business of BA in the provision of air freight services. The exact details are not material and the general picture those details paint is not disputed. That picture is relevant in giving some idea of the scale of the allegations made in the particulars of claim. That scale can be judged by the following figures relating to the air freight services provided by BA:
(1) their flights go from 299 points of origin to 316 points of destination across 122 different countries;
(2) there are 11,463 flights per week giving a figure of 3.5m flights transporting 5m tonnes of freight over the period of the complaint;
(3) 18% of the freight carried does not touch the EU and 28% does not touch the UK;
(4) the distribution chain of goods carried from producer to consumer contains at least 8 links the details of at least 5 of which are unknown and unknowable to BA.
- The claim is not limited to direct or indirect purchasers of air freight services from BA. It extends also to the direct or indirect purchasers of air freight services from any other undertaking providing air freight services which was party to the alleged agreements or concerted practices. Paragraph 4 of the Particulars of Claim alleges that the undertakings included the 9 airlines specified in that paragraph and referred to in paragraph 1 above. Further the claim is not limited to direct or indirect purchases of air freight services effected within the Common Market, EEA Member States or the United Kingdom. Although a necessary ingredient of the alleged infringements is that the object or effect of the agreements and concerted practices relied on was to prevent, restrict or distort competition within those territories, if those conditions are satisfied the direct or indirect purchase and the supply of the relevant air freight services at inflated prices may be concluded and performed anywhere in the world.
- These considerations led Mr Swallow, in paragraph 9 of his witness statement, to observe that:
"..the class that purportedly forms the representative element of the claim, on the face of the pleadings, is not only unidentified, but unknowable, potentially comprising every conceivable so-called direct and indirect purchaser worldwide who at one stage or another were arguably affected – directly or indirectly – by the cost of air transport shipping services during the relevant period (1999-2006)."
- In a witness statement made by Mr Smith, a partner in the firm of solicitors acting for the claimants, the extent of the world-wide air cargo business of BA is not disputed. He contends that the size of the class of represented claimant is the unavoidable consequence of the infringements alleged and irrelevant to the proper construction and application of CPR rule 19.6. He emphasises that the background to the claim lies in the conviction of BA and other airlines in the United States for participating in a world-wide price-fixing cartel. He relies on a Plea Agreement made by BA with the US Department of Justice Antitrust Division dated 31st July 2007, by an employee of BA, Keith Packer, dated 17th October 2008 and similar proceedings in Australia and New Zealand. In addition he points out that the European Commission is currently investigating an alleged cartel in the provision of air freight services under reference 'Case COMP 39.258' and has sent out Statements of Objections to a number of air freight undertakings including BA, Air France-KLM and SAS. The existence of that investigation has at least two consequences. First, as the parties have agreed, further proceedings in this action must be stayed pending the conclusion of the European Commission's investigation. Second, the lack of particularity in the present particulars of claim may be capable of being cured by amendments made later in the light of the Commission's findings.
- In addition it is relevant to note that the claimants' solicitors have also received instructions to act for at least 178 further potential claimants. They have indicated that, as and when the agreed stay is lifted, they intend to apply for permission to add them as claimants both in their own right and, if I do not accede to the present application, as representatives.
The reported cases
- I have been referred by counsel for both parties to many reported cases decided under CPR Rule 19.6 and its predecessors RSC Ord 15 r.12 and Rule 10 of the rules scheduled to the Supreme Court Act 1873. Though there have been minor variations in their terminology all of them have required that the plaintiff or claimant shall have "the same interest" in the proceedings as those he purports to represent. As the parties have relied on them for different propositions and varying dicta it is convenient, as a necessary preliminary to a consideration of the parties' submissions, briefly to describe the circumstances of each of them. They are, in chronological order, Duke of Bedford v Ellis  AC 1; Aberconway v Whetnall (1918) 87 LJ Ch 524; Smith v Cardiff Corporation (No.1)  1 QB 210; John v Rees  Ch 345; Prudential Assurance Co Ltd v Newman Industries Ltd  Ch 29; CBS Songs Ltd v Amstrad Consumer Electronics plc  Ch 61; Irish Shipping Ltd v Commercial Union Assurance Co Ltd  2 QB 206; National Bank of Greece v RM Outhwaite  All ER (D) 59,  CLC 591 and Independiente Ltd v Music Trading On-line (HK) Ltd  EWHC 470.
- Duke of Bedford v Ellis  AC 1 is the first and most significant of the reported cases to which I have been referred. The Duke of Bedford was the owner of Covent Garden where for many years there was carried on a market regulated by the Covent Garden Market Act 1828. Mr Ellis and his fellow claimants sued "on behalf of themselves and all other the growers of fruit, flowers, vegetables, roots or herbs within the meaning of" that Act to enforce certain preferential rights to stands in the market they alleged to have been conferred on that category of grower by section 6 of the Act. The Duke applied for the writ and all subsequent proceedings to be set aside. Romer J acceded to this application (see  1 Ch 503) on the grounds that the growers did not have a common proprietary interest in the market and that their collective statutory right could only, in the absence of special damage, be asserted by the Attorney-General. The Court of Appeal, by a majority, reversed that decision on the ground that the Act conferred on the growers as a class certain preferential rights which they were entitled collectively to enforce (see  1 Ch 511). That decision was upheld, by a majority, in the House of Lords.
- On the appeal counsel for the Duke had objected that the class of grower was large and fluctuating. Counsel for the plaintiffs accepted that description but pointed out that the class was capable of being ascertained. Lord Macnaghten, with whom Lord Morris and Killanin agreed, held that there was no reason to restrict the operation of the rule as Romer J had done. He considered (p.7) that the relevant rule:
"...was only meant to apply the practice of the Court of Chancery to all divisions of the High Court. The old rule in the Court of Chancery was very simple and perfectly well understood. Under the old practice the Court required the presence of all parties interested in the matter in suit, in order that a final end might be made of the controversy. But when the parties were so numerous that you never could "come at justice," to use an expression in one of the older cases, if everybody interested was made a party, the rule was not allowed to stand in the way. It was originally a rule of convenience: for the sake of convenience it was relaxed. Given a common interest and a common grievance, a representative suit was in order if the relief sought was in its nature beneficial to all whom the plaintiff proposed to represent."
Later (p.9) Lord Macnaghten noted that all growers had the same rights, they all relied on the same Act of Parliament as their common charter. In relation to the observations of counsel to which I have referred he commented (p.11):
"It was said that the growers are so fluctuating and indefinite a body that it is impossible to tell who is or who is not a grower, especially in these modern times when there are such improved facilities for carriage of goods. I cannot say that I am much impressed with that difficulty. It seems to me that the description of the persons apparently intended to be favoured by the Act is sufficient for all practical purposes. It may be difficult or impossible to compile a catalogue of growers. But there cannot, I think, be much difficulty in determining whether a particular person who claims a preferential right to a vacant stand in the market is a grower or not."
- Reference was also made to the speech of Lord Shand who agreed that the decision of the Court of Appeal should be upheld. He said (p.16):
"These statements seem to me to amount clearly to an averment not only of the existence of preferential rights, and of the same or substantially the same preferential rights in all the plaintiffs, but to a charge against the appellant that he violates these rights, or refuses to give effect to them, and it follows that the plaintiffs have the same interest in the cause or matter of the complaint. There is no difference in their claims. They all ask the same remedy, which it is unnecessary to specify further than to say they all claim to have a declaratory decree by the Court which shall give effect to their statutory privileges the same in the case of each of them, as growers of fruit, flowers and vegetables, and an injunction to restrain the appellant from doing any act contrary to such declaratory decree. There is thus one cause or matter only in which all of the plaintiffs have an interest, and in which other "growers" have the same interest, as disclosed in the record, that matter being the disregard by the defendant of their statutory privileges, for which accordingly one and the same remedy in the form of the different heads of claim is asked."
- It is, in my view, important to recognise that in Duke of Bedford the issue was whether the class of grower to which s.6 of the Covent Garden Market Act 1828 referred had, under that Act and as against the Duke and other members of the public, preferential rights to occupy stands in the market. The issue was one of statutory interpretation in which all members of the class of 'grower' had the same interest.
- In Aberconway v Whetnall (1918) 87 LJ Ch 524 Lord Aberconway and two others sought to recover on behalf of themselves and all other subscribers to a fund for the benefit of the defendant the amounts they had collectively subscribed on the grounds that they were induced to do so by misrepresentation. Eve J considered (p.526) that insofar as the claim was made in a representative capacity it was misconceived because it could not be said that:
"...the donors to the fund have a common interest and a common grievance when the very existence of the grievance depends on facts which may differ in each individual case."
- Similarly in Smith v Cardiff Corporation (No.1)  1 QB 210 the claim insofar as it purported to be representative was struck out. The plaintiffs were tenants of the corporation and challenged a scheme of the latter for increasing the rent of its council housing as ultra vires. They claimed to sue on behalf of themselves and all other tenants of the Corporation. But the scheme they sought to challenge provided for differential rents taking into consideration the financial circumstances of individual tenants. Of some 13,000 tenants the rents of only 8,000 would be increased. The representative claim was struck out on the ground that the class of corporation tenant did not have a common interest or grievance and the relief sought was not in its nature beneficial to all members of the class which the plaintiffs claimed to represent.
- In John v Rees  Ch 345 the Court was concerned with the validity of proceedings at a meeting of the members of the local Labour party which had broken up in some disorder. The proceedings were instituted by the leader of one faction on behalf of himself and all other members of the local Labour party other than the three individual defendants who constituted the other faction. Megarry J refused to strike out the representative claim. He said (p.371):
"What I am concerned with in action No. 1 is the validity of proceedings at a meeting which had as part of its business the election of the officers of P.D.L.P. All members of P.D.L.P. have a common interest in P.D.L.P., its officers and its assets: and it is plainly desirable that all should know and recognise who its officers are and are not. If there were to be two different actions brought, one between A and B and the other between X and Y, it might be that, on the different evidence adduced in the two actions, the court would reach a different conclusion in each action, holding in A v. B that the officers were one set of persons, and in X v. Y that another set were the officers. Other members might then institute other proceedings and, not being bound by the two actions already brought, contend for yet other persons as officers. Accordingly, it seems at least desirable that any proceedings should be so constituted that they will bind all members. This can be achieved only if all are parties to the proceedings, either directly or as being represented by one of the parties.
Although there is thus a clear common interest between all the members in having the issue determined, they may be far from united in the way in which they wish it to be resolved. Some may support one faction, some another. But if the named parties to the action together put forward every view that is seriously advanced, I cannot see that any real harm is done to a person whose part in the action is merely that he is represented by the plaintiff, even if the plaintiff is supporting a different cause, provided that there is a defendant who does stand for the cause espoused by the person being represented: actions are decided by reference to justice according to law, and not by counting heads."
- It is, in my view, important to note that the common interest of the class as a whole lay in the validity of the meeting and the election of the officers. All were equally concerned in that issue, whatever their views on the underlying political dispute. There was no conflict of interest in relation to the issue even if there was in relation to the underlying political cause of the problems.
- Prudential Assurance Co Ltd v Newman Industries Ltd  Ch 229 concerned the approval by the members of Newman Industries Ltd in general meeting of an acquisition by Newman of the assets of another company in which its directors were substantially interested. The shareholders' approval was given on the basis of a circular. The action was commenced against the directors by the Prudential as a minority shareholders' action alleging that the circular was tricky and misleading. It sought damages for conspiracy. For reasons it is not necessary to describe the Prudential then sought to amend its writ and statement of claim so as to claim damages on behalf of itself and "on behalf of all the shareholders of [Newman] on July 29, 1975, who, like the plaintiff, have suffered damage and are entitled to damages". Vinelott J considered a number the cases cited to him, including Aberconway and observed that:
"These cases, in my judgment, establish two propositions. First, no order will be made in favour of a representative plaintiff if the order might in any circumstances have the effect of conferring on a member of the class represented a right which he could not have claimed in a separate action or of barring a defence which the defendant could have raised in such proceedings. Secondly, no order will be made in favour of a representative plaintiff unless there is some element common to the claims of all members of the class which he purports to represent."
- Vinelott J rejected the submission that in no circumstances could there be a representative action on behalf of a class each of whom had a separate cause of action in damages for tort. In that context he observed (p.255):
"The second condition is that there must be an "interest" shared by all members of the class. In relation to a representative action in which it is claimed that every member of the class has a separate cause of action in tort, this condition requires, as I see it, that there must be a common ingredient in the cause of action of each member of the class. In the present case that requirement is clearly satisfied."
- Vinelott J then considered whether, as a matter of discretion, to permit the amendment sought. In relation to its form he said (p.256):
"As drafted the order which the plaintiff seeks in its representative capacity is for a declaration that the plaintiff in its personal capacity as a shareholder in Newman Industries and on behalf of itself and all other shareholders in Newman Industries who like the plaintiff have suffered damage is entitled to damages against the defendants, Bartlett and Laughton, for conspiracy. The practical effect of such a declaration would, it seems to me, be no greater and no less than the effect of declarations, first, that the circular was tricky and misleading; secondly, that the individual defendants conspired to procure its circulation in order to procure the passing of the relevant resolution; and thirdly, that in so doing they conspired either to injure the plaintiff and the other shareholders at that date or to commit an unlawful act, or to induce a breach by the first defendant company of its contractual duty to the shareholders. It would, I think, be better that those declarations, which constitute the common element of any claim by any member of the class for damages for conspiracy, should be so spelt out. Further, I can see no reason for defining the class of shareholders of the first defendant company at July 29, 1975, as being those "who like the plaintiff have suffered damage and are entitled to damages." The words I have cited appear to me to be unnecessary and undesirable. The members of the class who share a common interest in obtaining the declarations I have outlined are shareholders other than the second and fourth defendants as at July 29. A person coming within that class will be entitled to rely on the declarations as res judicata, but will still have to establish damage in a separate action."
- CBS Songs Ltd v Amstrad Consumer Electronics plc  Ch 61 was relied on by counsel for the claimants for the judgment of Sir Denys Buckley on the availability of a representative claim for the owners of copyright in sound recordings for infringement of copyright by the maker of machines designed to copy them. Sir Denys Buckley considered that such a claim might be maintained as a representative action because, as in Duke of Bedford:
"...the plaintiffs, and all the persons whom they purport to represent, have statutory rights of the same character under the Copyright Act 1956, which the action is designed to protect from infringement resulting from the conduct of the defendants which is complained of. They share, in my judgment, a common interest and a common grievance, such as Lord Macnaghten had in mind. The relief which is primarily claimed is injunctive in a form which would benefit the plaintiffs and all whom they purport to represent in the same way, that is to say, by protecting them from the risk of infringements incited by the defendants."
- In Irish Shipping Ltd v Commercial Union Assurance Co Ltd  2 QB 206 the relevant class were the 77 underwriters each of whom had entered into separate insurances but on the same terms including one which obliged that underwriter to abide by any judgment obtained by the insured against the lead underwriter. The Court of Appeal considered that the principle of Duke of Bedford applied notwithstanding that some of the represented class might not know of the proceedings or might have an individual defence. The procedure and its effect were described by Purchas LJ (p.238) in these terms:
"Although the judgment is to be binding upon those comprised in the class represented, protection is given to members of the class sued who may have been improperly joined in the class or who may have individual grounds of defence, since the judgment cannot be enforced until the plaintiff has complied with the requirements of Ord. 15, r. 12(3), (4) and (5). (3) However, the effect of rule 12(5) is merely to protect the member of the class sued from having the judgment enforced against him. The judgment is still valid for other purposes such as a counterclaim or other process in which that person may wish to rely upon allegations which will be denied to him by the findings of the judgment, the issues being res judicata for such purposes. It will be seen that there is nothing in the wording of the rule itself which would restrict the wide ambit in which the rule should operate, in line with the old Chancery practice; but there are now built-in safeguards to protect a member of the class who may have particular defences or may be able to distance himself from the class in other respects. This accords with the concept, as I see it, of the old rule, namely a broad rule of procedural convenience to be exercised with a wide but carefully used discretion."
- I can deal with the last two cases, namely, National Bank of Greece v RM Outhwaite  All ER (D) 59,  CLC 591 and Independiente Ltd v Music Trading On-line (HK) Ltd  EWHC 470 relatively quickly. In the first Andrew Smith J and in the second I emphasised that CPR Rule 19.6 is to be interpreted and applied with the overriding objective in mind. That principle was applied in the former to enable one Lloyd's syndicate who subscribed to a particular policy to represent all the other syndicates who so subscribed in relation to a claim under the policy. In the latter I applied it to enable one member of the British Phonographic Industry Ltd and Phonographic Performance Ltd to sue on behalf of all other members of those bodies who owned or were exclusive licensees of UK copyrights in sound recordings in relation the infringement by the defendants of those copyrights. In paragraph 27 I said:
"The common interest arises from the fact that the claim as pleaded is made in respect of the UK copyright in a sound recording to which any Relevant Member is entitled as owner or exclusive licensee. The common grievance arises from the facts pleaded regarding the operation of the CD-WOW site. There is at least a threat to supply a CD embodying a sound recording to which a Relevant Member is so entitled in response to an order placed on the website. The question whether that method of supply constitutes an infringement of the UK copyright in the sound recording is common to all Relevant Members because the same method is used for all supplies. Unless and to the extent that the defendants seek to put in issue the subsistence or ownership of the UK copyright contrary to the presumptions for which s.105 CDPA provides or the consent of a Relevant Member to the acts complained of the issues of fact and law will be identical however many sound recordings or Relevant Members are involved. It would be absurd and contrary to the propositions expressed by Megarry J in John v Rees and CPR Rule 1 if there had to be a separate claim in respect of each Relevant Member at least until it is seen if the issues in relation to that Relevant Member are substantially different from those relating to the generality of the Relevant Members."
I considered that the fact that individual relevant members had not authorised the proceedings was immaterial.
The submissions for the parties
- Counsel for BA contends that the particulars of claim are embarrassing in failing to provide any basis on which 'the other persons' with the 'same interest in the claim' can be identified. Given that the court is unable to do so now the representative claims cannot fall within CPR Rule 19.6. The riposte of Counsel for the claimants is that there is no requirement that the members of the class should be identifiable at any time before judgment. He submits that at that later stage it will be possible to ascertain whether any given person is within the class or not.
- The second broad submission of counsel for BA is to the effect that the class, so far as identifiable, is not a single homogenous class but inherently, at least, two classes with conflicting interests. Accordingly, so he submits, a representation order is as inappropriate in this case as it was in Smith v Cardiff Corporation. The suggested conflict of interest arises from the concept of 'passing on'. Thus in the case of any particular claimant the existence and quantum of his claim against BA will depend, at least in part, on whether the inflated costs, as alleged, were absorbed by him or passed on to his buyer. If they were absorbed then, in principle, they can be recovered by him from BA. If they were passed on then only his buyer could recover from BA. Counsel for BA submits that it is clear that not all members of the class concerned in any particular infringement can recover because it will depend on who passed on the inflated cost and who absorbed it.
- The response of counsel for the claimants is threefold. First, the principle of passing on involves a difficult and undecided point of law such that I should not assume its resolution in any particular direction. For this proposition he relies on the decision of the Competition Appeal Tribunal in BCL Old Co. Ltd v Aventis SA  CAT 2 and the decision of the US Supreme Court in Hanover Shoe Inc. v United Shoe Machinery Corp. (1968) 392 US 481. Second, the principle is only relevant to the quantification of the damage sustained by any particular claimant and so is not relevant to any of the issues for which the representation order is sought. Third, the form of representation can be amended to put the matter beyond doubt by excluding from the represented class those "whose loss was passed on".
- Counsel for BA's third general objection is to the effect that to allow the claims of so many people to be pursued in a representative capacity would deny to BA the opportunity of raising the defences available to it in the event of a claim by individual claimants. Counsel for the claimants comments that the only such defence identified in argument is that of 'passing on' with the consequence that this point is, in essence, no different to the last one.
- Finally counsel for BA submits that the declaration sought is improper and not one the court can grant. This is because, so he asserts, the proposed declaration assumes all issues of actual causation and loss have been determined in favour of the claimant and brand damage depends on the nature of the brand and will vary between one claimant and another. Even if those problems could be overcome in the case of direct purchasers the concept of indirect purchase is so fluid as to be wholly inconsistent with any present declaration of right. Counsel for the claimants did not refute these objections specifically; he merely suggested that any such difficulties could be overcome by the amendments to paragraphs 9 and 10 of the particulars of claim he proposed.
- The starting point must be the rule itself. The essential pre-conditions for its operation are evident from the opening words "where more than one person has the same interest in a claim the claim may be begun...". The first pre-condition is that there should be more than one person who satisfies the remaining preconditions. There is no limit to the number of persons in the class to be represented. Presumably it cannot be so large as to constitute the enforcement of public rights by persons who have not sustained special damage; that is the prerogative of the Attorney-General. But the mere fact that in this case the relevant class is both numerous and geographically widely spread is not of itself an objection to a representative action. Nevertheless the more extensive the class the more clearly should the other pre-conditions be satisfied.
- The second pre-condition is that those persons have the relevant interest at the time the claim is begun. The rule appears to me to be specific in that respect. It must follow that the submission of counsel for the claimants that the identity of interest need only exist at the time that judgment is given must be rejected. No doubt it is necessary, given the terms of sub-paragraph (4) of rule 19.6, that it exists then but the opening words of sub-paragraph (1) shows that it must exist when the claim is begun as well. Accordingly, identity of interest at the time of judgment in the action would be a necessary condition for seeking to enforce it but would not be sufficient identity at the time the claim was issued.
- So the essential question is whether the class the claimants seek to represent had the same interest in the claim as the claimants when the claim was issued on 18th September 2008. The phraseology is the same as that used in the rules under consideration in each of the reported cases to which I have referred. I can see no reason why the words 'the same interest' should not be interpreted in the same way. That was the view of Andrew Smith J in National Bank of Greece and of me in Independiente.
- It follows that the principles enunciated by Lord Macnaghten in the Duke of Bedford are to be applied. On that basis the claimants and the class they seek to represent must all have "a common interest and a common grievance" and "the relief sought [must] in its nature [be] beneficial to all" of them. If those conditions are satisfied it matters not that the class of person represented may fluctuate.
- The essential distinction between the class in this case and the class in all the other cases to which I have referred is that the criteria for inclusion in the class depend on the outcome of the action itself. Thus the second sentence of paragraph 8 and paragraph 10 of the particulars of claim describe the class as "direct or indirect purchasers of air freight services the prices for which were inflated by the agreements or concerted practices" referred to earlier in the particulars of claim. That formula describes the allegations made by the claimants against BA which they must prove in the action. By contrast the class of 'grower' in the Duke of Bedford was prescribed by the Covent Garden Market Act 1828. Its composition was not dependent on the outcome of the action. The relief sought against the Duke would be equally beneficial to all such growers. In John v Rees the composition of the class did not depend on the outcome of the action for it consisted of all members of the local Labour party other than the defendants. The relief sought was for the benefit of all of them in determining the validity of the meeting and the identity of the officers of the local party. In Prudential Assurance the class was defined by reference to those on the register of members at the time the critical resolution was passed and was not limited to those who had suffered consequential damage. Similarly in CBS Songs, Irish Shipping, National Bank of Greece and Independiente the criteria for inclusion in the class were independent of the outcome of the action.
- In my view this distinction demonstrates that Rule 19.6 does not authorise these claimants to represent the class described in the particulars of claim. The simple reason is that it is impossible to say of any given person that he was a member of the class at the time the claim form was issued. It is not that the class consists of a fluctuating body of persons but that the criteria for inclusion in the class cannot be satisfied at the time the action is brought because they depend on the action succeeding.
- In addition I accept the submission of counsel for BA that even if the criteria for inclusion in the class are sufficiently described the relief sought in the action is not equally beneficial for all members of the class. It is not disputed that damage is a necessary element in the cause of action of individual members of the class. Whether or not an individual member of the class can establish that necessary ingredient will depend on where in the chain of distribution he came and who if anyone in that chain had absorbed or passed on the alleged inflated price. Given the nature of the cause of action and the market in which the relevant transactions took place there is an inevitable conflict between the claims of different members of the class.
- I do not accept any of the grounds on which counsel for the claimants sought to avoid this consequence. First, the judgment of the US Supreme Court in Hanover Shoe was a policy decision not open to the courts in England. For that reason alone it demonstrates that the problems the claimants' advisers anticipate are better dealt with by Parliament than by stretching the use of Rule 19.6 to accommodate cases such as this. Second, the conflict between different members of the class is not a consequence of any esoteric defence of 'passing on' but is inherent in damage being a necessary ingredient in the cause of action. That this is so is apparent from the judgments of Tuckey and Longmore LJJ in Devenish Nutrition Ltd v Sanofi-Aventis SA  EWCA Civ 1086, paras 147 and 151. Third, this case is quite unlike John v Rees in which the opposing views would have been put by one faction or the other because the opposing views in this case would arise between members of the class inter se, not by the parties in opposition to each other in the action itself. Fourthly, the suggested amendment so as to exclude claimants for damage which had been passed on would not solve the problems. Indeed it might increase them. Such an exclusion would mean that it would be impossible to ascertain the members of the class even when judgment in the action had been given. It would be necessary to determine where in the chain of distribution the loss had fallen in whole or in part. That issue would not be determined in the action itself. It would necessitate further proceedings between the various links in the chain before it could be seen which of them was entitled to recover damages from BA. Consequently, the inclusion of such a provision would mean that even on the claimants' case the conditions of Rule 19.6 could not be satisfied. Indeed it might be said that that defect in the particulars of claim already exists in paragraphs 9(1) and(2).
- Counsel for the claimants emphasised that, as the authorities show, Rule 19.6 is intended to provide a convenient means by which to avoid a large number of substantially similar actions. Similarly, it is the case that the rule should be construed and applied with the overriding objective in mind. I do not think that those considerations assist his case. It is not convenient or conducive to justice that actions should be pursued on behalf of persons who cannot be identified before judgment in the action and perhaps not even then. Further, the avoidance of multiple actions based on the same or similar facts can equally well be achieved by a Group Litigation Order made under CPR Rule 19.11. The existing 178 additional claimants and any others who seek to join in after the publication of the European Commission's investigation are more conveniently accommodated under that procedure. The statements in, for example, the Duke of Bedford must be read in the light of the fact that Group Litigation Orders were not available until 2000.
- For all these reasons I will make the order sought by para 1 of the draft minute of order attached to the application notice. In those circumstances it is unnecessary for me to consider the alternative application of counsel for BA for an order in accordance with Rule 19.6(2). I understand that it is common ground that I should also make the orders sought in paras 2 and 3 of that minute. Accordingly, I will make those orders as well.
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