Who wins from PACCAR? Cartelists and corporate wrongdoers

Who wins from PACCAR? Cartelists and corporate wrongdoers

20 Feb 2024 Posted By Richard Smith

RHA Managing Director Richard Smith tells The Law Gazette about how litigation funding is at risk by recent court rulings.

The Post Office Horizon scandal has put the spotlight on the litigation funding sector. As Alan Bates has said, he and his fellow sub-postmasters would not have been able to mount their marathon legal battle and obtain justice without it. 

But as he also points out, this form of funding is now at risk as a result of the Supreme Court judgment in PACCAR which threatens to choke off a ‘route to justice for similar cases in the future’. 

Last year's PACCAR decision was an appeal stemming from the case brought by the Road Haulage Association (RHA), the organisation I represent, against PACCAR and several other truck manufacturers who were involved in a major price fixing cartel.

Alan Bates is right on both counts and I second his call for the government to urgently legislate to fix this. The RHA’s members, many of whom are small family-run businesses of truck hauliers with a handful of vehicles in their fleets, wouldn’t have stood a chance of bringing their cases to court without the help of this funding mechanism. And the PACCAR judgment does present a significant risk to the ability of others to do the same in the future.

Why is PACCAR so significant? It could undermine the funding model and deny access to justice for many.

In simple terms, the legal challenge is the latest in a long line of cynical delay and frustrate tactics deployed by large, deep-pocketed corporations. For PACCAR Inc, and the other defendants in our case, delay is simply the name of the game.

I’m speaking from experience.

In 2016 PACCAR Inc and other truck manufacturers were found to have colluded to exchange information about prices and emissions technologies, which we say inflated truck prices for thousands of hauliers who my organisation represents. Such a cartel is illegal under EU and UK competition law. These are the facts and even the manufacturers admitted their involvement in the cartel (and were fined over €3.4 billion when you include Scania which, unlike the other manufacturers, chose not to settle but have had their fine upheld by each court it has appealed to up to and including the European Court of Justice).

You’d think that would be the end of the matter. But since 2018 my organisation, the RHA, has been embroiled in lengthy proceedings to secure compensation for our members and other affected hauliers. But the cartel has fought us every step of the way, by leveraging technical and procedural points to slow down progress of the claim, in what I perceive to be a deliberate attempt to force up our legal costs and exhaust us. Meanwhile, some family-run businesses have run out of road and shut up shop - some have even died along the way.

We will not give up, as we are determined to obtain redress for our members. The only way we have been able to pursue this for more than six years — and pursue justice for our members — is because of the ongoing support of Therium, the litigation funders backing our case and who also funded Alan Bates and the other subpostmasters.

The PACCAR ruling was the latest attempt by the defendants in our case to frustrate and delay the legal process rather than grapple with the real issues in the case. It was a technical challenge to the well-established funding model, enabled by some poorly drafted legislation which the government has promised to rewrite at the earliest opportunity.

We now have to renegotiate our funding arrangements to account for the judgment, wasting more of the courts’ time.

Now to why PACCAR has much wider significance beyond the case in question.

In a finely balanced industry where funders back cases after significant due diligence, weighing up risk and reward, what do you think funders will make of the additional costs and time needed to make their arrangements PACCAR-compliant? And even if they do make them compliant, without clear legislation to solve the problem the risk is that the likes of the cartelist will continue to challenge any work-arounds.

Who wins from PACCAR? The cartelists, like PACCAR themselves, and other corporate wrongdoers like the Post Office.

This is why litigation funding and clarity for the sector going forward is so important. It tips the scales back in favour of the smaller businesses, the consumers, the victims who do not have the resources to pursue justice any other way.

And this is why the law needs to be clarified urgently. The government should deal with this head on, and include a full fix for this issue in the Horizon Bill, or any other available legislative vehicle, to remove this ongoing uncertainty for the sector and clarify the law around the funding arrangements. Otherwise we risk shutting off access to justice for similar cases brought by small businesses, consumers and all victims of corporate wrongdoing in the future.

In the meantime, the RHA, with the continued support of Therium, will not allow PACCAR to derail access to justice for the haulage industry.

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