Bookmakers' Afternoon Greyhound Services & Ors v Amalgamated Racing Ltd & Ors

MR JUSTICE MORGAN: The introduction .

The procedural history .

"RUK has media rights agreements with the RUK racecourses, the RUK agreements, pursuant to which it is licensed to negotiate and/or enter into commercial media agreements with third parties, including agreements in respect of inter alia the rights to supply images, sound and data in respect of horseraces held at the RUK racecourses to LBOs in the United Kingdom and the Republic of Ireland (the RUK relevant rights)."

"In relation to the defendants ..."

10. 19(a) states:

"Pursuant to the RUK agreements, RUK is entitled to negotiate commercial agreements on behalf of the RUK racecourses in respect of the RUK relevant rights."

11. Paragraph 19(d) reads as follows:

"In or around December 2006, RUK, acting collectively on behalf of the RUK racecourses, negotiated an agreement with Amrac on an exclusive basis in respect of the RUK relevant rights (the Amrac Agreement), pursuant to which the RUK racecourses entered into 30 licences with Amrac on 31 January 2007 (the Amrac licences) granting exclusive rights to Amrac from 1 April 2007 in relation to the racecourses at Bangor, Chester, Goodwood, Newbury and York, and from 1 January 2008 in relation to the remaining RUK racecourses."

12. Paragraph 19(e) of the original pleading was in this these, and I quote:

"The licensing of the RUK relevant rights to Amrac was negotiated and concluded by the defendants on a closed basis. Competitors to Amrac such as BAGS and SIS were not given the opportunity to negotiate or tender for the RUK relevant rights."

13. The pleading continues with a further heading, which is, "Breach of Chapter 1 Prohibition/Article 81, subparagraph (1), EC Treaty." In that section the pleading begins at paragraph 20, which is in these terms:

"The claimants submit that the RUK agreements, Amrac Agreement and Amrac licences are individually and/or collectively contrary to the prohibitions established by section 2(1) of the Competition Act 1998 (the Chapter 1 prohibition), further or alternatively, Article 81(1) of the EC Treaty, because they provide for or give effect to the collective exclusive licensing of the RUK relevant rights to Amrac on a closed basis."

14. Paragraph 21 is in these terms:

"Further or alternatively, by virtue of the acts identified above, the defendants or some of them participated in a concerted practice contrary to the Chapter 1 prohibition, further or alternatively Article 81(1) of the EC Treaty, because they sought to procure, facilitate and/or give effect to the collective exclusive licensing of the RUK relevant rights to Amrac on a closed basis (the concerted practice)".

15. Paragraph 22 is of some importance as to the interpretation of paragraphs 20 and 21. Paragraph 22 states that particulars of breach are set out at paragraphs 26 to 30 below:

16. Paragraph 23 is in these terms:

"In the premises, the RUK agreements, Amrac Agreement and Amrac licences are unlawful and automatically void."

17. As I indicated, paragraph 22 stated that particulars of the breach were given at paragraphs 26 to 30 below. Of those paragraphs, paragraph 26 is the more important for present purposes, and I will read it in full. It is in these terms:

"Insofar as the RUK agreements, Amrac agreement, Amrac licences and/or the concerted practice each provide for and/or give effect to the collective exclusive licensing of the RUK relevant rights on a closed basis, they have the object of restricting competition.

"Particulars of anti-competitive object.

"(a) The collective exclusive licensing on a closed basis prevents the individual RUK racecourses from being able to market their relevant rights individually. In the absence of such collective exclusive licensing on a closed basis, the individual racecourses would be entitled to set prices and other licence conditions independently of one another and in competition with one another. The collective exclusive licensing on a closed basis thus eliminates competition, including price competition, between individual RUK racecourses in respect of the marketing of the RUK relevant rights.

"(b) The collective exclusive licensing to Amrac on a closed basis prevents competitors to Amrac from having the opportunity to negotiate or tender for the RUK relevant rights. Such collective exclusive licensing on a closed basis forecloses competition from other actual or potential competitors to Amrac to the detriment of competition in the market for the provision of images, sound and data to LBOs in respect of horseracing at the RUK racecourses."

18. The original pleading then continues with paragraph 27, which alleges that the same four matters, namely the RUK agreements, the Amrac agreement, the Amrac licences and/or the concerted practice, which provided for or gave effect to the collective exclusive licensing of the RUK relevant rights on a closed basis had the effect of restricting competition. Lengthy particulars are then given of the pleaded effect of the four matters.

19. It is, of course, well-known that Article 81(1) distinguishes between agreements which have a certain object and agreements which have a certain effect, and the pleader has carefully spelt out in paragraph 26 what is said to be the case as regards the object of the matters, and in paragraph 27 what is said to be the effect of the matters. However, for present purposes it is not necessary for me to go to the many detailed allegations as to effect in paragraph 27 of the pleading.

20. The pleading then continues with a number of other matters said to be relevant. It is right to observe that the constant refrain of the pleading is to refer to and indeed use the phrase "the collective exclusive licensing of the RUK relevant rights on a closed basis."

21. As to the relief sought in the prayer for relief, the first head of relief claims as follows:

"A declaration that the collective exclusive licensing on a closed basis of the rights necessary for the supply to LBOs in the United Kingdom and the Republic of Ireland of images, sound and data in respect of horseraces held at the RUK racecourses is contrary to section 2, subsection (1) of the Competition Act 1998 and Article 81(1) of the EC Treaty."

22. There are then injunctions claimed, preventing the defendants from giving effect to or providing for the collective exclusive licensing of the rights on a closed basis. There is a claim to damages for loss sustained pending the grant of injunctive relief.

23. That is what I need from the original particulars of claim. Mr Green, Queen's Counsel, who appears on behalf of the claimants has referred me to certain paragraphs in the defence and counterclaim. I can take the paragraph which I regard as relevant from a helpful note which has been prepared by Mr Green, rather than going to the pleading itself. The paragraph which Mr Green draws my attention to is paragraph 60, in particular subparagraph (a), which is in these terms, and I quote:

"As to the alleged collective licensing of RUK LBO rights to Amrac, (a) it is denied that Amrac took a collective licence of the LBO rights of all RUK courses as alleged by reason of the following:

"1. The LBO rights of the Jockey Club Racecourses are owned by a single undertaking, which during its negotiations with Amrac was represented separately from the remaining RUK racecourses. In the premises, the LBO rights for the Jockey Club Racecourses were not "collectively" licensed; and/or

"2. the operators of the remaining 17 RUK racecourses negotiated with Amrac, represented by a single solicitor -- see further paragraph 53 above -- and concluded separate licences with Amrac; and/or

"3. there is no collective licensor of the RUK LBO rights that negotiated the licences with Amrac. In particular, RUK did not collectively licence the LBO rights to Amrac."

24. I can cease reading from paragraph 60 at that point.

25. Mr Green also referred me to the reply and defence to counterclaim. Again, I can take the paragraphs he wished to draw my attention to from his helpful note. At paragraph 19 of the reply, this was pleaded:

"The RUK agreements facilitated the licensing of the RUK relevant rights on a collective basis, as indicated in paragraphs 25 and 27 of the defence, and as set out at paragraph 14 above, and therefore had the effect of restricting competition for the reasons set out at paragraphs 27(a), (c), (d), (f), (g) and (k) of the particulars of claim."

26. I draw attention to the fact that that paragraph which Mr Green emphasised does not refer to a pleading of a restriction on competition by object, as that matter was dealt with not at paragraphs 25 and 27 but in paragraph 26 of the particulars of claim.

27. Mr Green also referred to paragraph 22(a) of the reply to defence and counterclaim, which is in these terms:

"In respect of paragraph 65(a), for the avoidance of doubt, it is averred the 18 individual racecourses owners of the 30 RUK racecourses, either acting on their own behalf and/or through/with RUK and/or through/with RMS, acted collectively in negotiating the Amrac licences for the reasons set out in the particulars of claim, and those arising from the defence are set out at paragraphs 14 and 18 above."

28. That was the state of the pleadings before the trial of this action began. I will not go at this point to the proposed amendments of the particulars of claim, as I ought to describe further the procedural history up to more recent events. Before the start of the trial, the parties' counsel had prepared detailed written openings. I can take the relevant parts of the claimants' written opening from Mr Green's note. What Mr Green, on behalf of the claimants, submitted appears from paragraphs 15, 16 and 22 of his opening submissions, his written opening submissions. Paragraph 15 reads:

"The claimants claim that the arrangements that underpin Turf TV are unlawful because (see particulars of claim paragraphs 20 to 27, re-amended reply and defence to counterclaim paragraphs 18 to 28) (a), the RUK racecourses licensed their LBO rights to Amrac on a collective basis at a common price."

29. Paragraph 16:

"This conduct represents classic cartel behaviour. It comprises inter alia price-fixing, joint selling, and joint refusal to license rights."

30. Paragraph 22:

"The object behind this agreement is candidly set out in the defendants' witness statements. It was no more and no less than a desire to increase the price at which they could licence their rights, ie they simply wanted more money. There can be no material doubt about this."

31. Mr Green did go on to refer to the parts of the evidence he regarded as material, but I need not read that into this judgment.

32. Mr Green's note also refers to the defendants' skeleton argument on the opening of this case. I will in fact go to the skeleton argument itself and not restrict myself to what is in Mr Green's note. In the defendants' opening submissions, the question of price-fixing is dealt with at the beginning of paragraph 147 and continuing for a few paragraphs thereafter. In paragraph 148, the defendants said this:

"Notwithstanding the hyperbole deployed, the accusation of price-fixing is without any basis in fact, law or economic theory."

33. I should explain that the defendants were aware that there was an allegation made of price-fixing because the claimants' written opening submissions, had been made available to the defendants before the defendants prepared their own written opening submissions.

34. In paragraph 149 of the defendants' opening submissions, the document refers to what is involved in an agreement to fix prices. At paragraph 151 of that document, the defendants submit, and I will read this:

"The Amrac licences do not have the object of restricting competition as described above, or indeed at all, and for the reasons given below, the claimants' suggestions to the contrary are wholly without merit."

35. There is then a heading in these terms:

"No horizontal agreement between courses."

36. In paragraph 152, the point is made that racecourses do not compete in relation to licensing their LBO rights, and paragraph 152 ends with this sentence, and I quote:

"There is accordingly no horizontal price-fixing agreement between competing undertakings capable of giving rise to an object restriction of competition for the purposes of Article 81(1)".

37. At the start of the trial, Mr Green on behalf of the claimants made detailed oral submissions. His note prepared for the present application quotes extensively from his oral opening. I can give the flavour of the matter by quoting some examples of what he has put in his note.

38. From the transcript for Day 1 of the trial, at page 13, Mr Green said this:

"What is the essence of the claimants' case? The essence of the claimants' case may be summarised in the following way. First, that the RUK racecourses agreed to license their rights to Amrac on a collective basis, including for a common price, collective price-fixing, that they did so on an exclusive basis, collective exclusive price-fixing, that they did this on a closed basis; in other words, there was no open auction or tender process for their rights, collective exclusive closed price-fixing, and that this is an infringement of Article 81."

39. On the first day of the trial, at page 19 of the transcript, Mr Green said this:

"Your Lordship knows that our submission in the present case is that the defendants' conduct in setting up Amrac to receive the exclusive licences is, stripped to its barest essentials, a naked, horizontal price-fixing arrangement, and it had as its avowed and express object the intention of raising prices. That is astonishingly clear from the defendants' witness statements."

40. Mr Green goes on to summarise what my reaction ought to be to a reading of those witness statements. Although what counsel says in opening is not a pleading, I do note however that in the passage I've just quoted, Mr Green did refer to the word "horizontal"; he referred to a "horizontal price-fixing arrangement".

41. Also on Day 1 of the trial, at page 23 of the transcript, Mr Green returned to his submission that what had happened here was price-fixing, and he expressed himself in energetic language as to the conduct of the defendants in that regard.

42. After Mr Green had completed his opening, Mr Roth, Queen's Counsel, on behalf of the defendants made detailed oral submissions extending to, I think, two or more days. Mr Green, in his note for the purposes for this application, has quoted extensively from Mr Roth's submissions. I think it is sufficient to give the flavour of what Mr Roth was saying for me to go to one or two passages only.

43. On Day 3 of the trial, on page 32 of the transcript, Mr Roth refers to the claim against the defendants. He talks about the concept of exclusive, collective and closed selling, and he adds a reference to price-fixing so that it can be said that Mr Roth appreciated that a case as to price-fixing of some kind was being put forward. The same point can be made by reference to page 116 of the transcript of the third day.

44. On the fourth day, at page 10 of the transcript, Mr Roth referred to the claimants' case being that the object of some arrangement or other was price-fixing. However, he went on to say at page 41 of the fourth day that this was not remotely a price-fixing case.

45. He continued his submissions on the fourth day, and one sees at page 57 of the transcript that he submitted that it was a fallacy to say that what had happened here was price-fixing, and the claimants' argument rested on another fallacy, which is that as a result of collective arrangements between RUK course operators and Amrac, a common price was agreed, or the claimants would say, fixed, and that amounted to price-fixing.

46. Before leaving Mr Green's note, I should refer to something that happened at page 73 of the transcript of the fourth day. Mr Green intervened during Mr Roth's submissions, and he did so to explain and make clear the point he wished to make about price-fixing. I will read the statement made by Mr Green at that point. He said this:

"We basically take the position Mr Swift took ..."

47. I interpose that Mr Swift QC had given advice to Amrac in particular prior to the parties entering into the relevant arrangements. Continuing with Mr Green's intervention, I quote:

"... that the suggestion that there is no collective selling is just simply impracticable, but he advised them of such and he said it's plain from the prior debates, exchanges of information, meetings between the RUK racecourses, common presentations, debates over prices, et cetera, et cetera, that that has to be viewed as collective selling involving the agreement of terms. It's quite plain from very, very, very many documents all the RUK racecourses met, they exchanged information, they used joint negotiators, et cetera, et cetera. That, if it results in an end result which is the same, is price-fixing."

48. Again, it would be wrong to take a statement made by counsel in argument as equivalent to a pleading, but Mr Green appears to be emphasising that a process of collective selling necessarily involves price-fixing. I think the last quotation I will give from the opening submissions by counsel is by referring to page 74 of the transcript for the fourth day. Mr Roth said:

"I have not yet addressed you on the question of whether it is or is not collective selling, which is a different thing from price-fixing. I'll come to that. The only point I was making was that one doesn't turn it into a price-fixing case through collective selling on the basis that this leads to one common price as opposed to lots of different prices, because in fact there is a greater price variation for the courses now across the board than there was before”

49. I trust that those perhaps lengthy quotations give some indication of the nature of the debate, and the way in which the term "price-fixing" was being attached as a label to elucidate the claimants' case to what the claimants were saying about the necessary consequence of collective selling.

50. After the openings, the court heard the evidence of many witnesses called by the claimants, the defendants and the third party. In addition to that oral evidence, the court has a number of witness statements on behalf of the defendants where the claimant indicated that they did not require the witness to attend for cross-examination.

51. I ought to say a brief word about some of the witnesses. It will be remembered that the defendants include some 18 operators of some 30 racecourses. One operator, the 6th defendant, Racecourse Investments Limited, RIL, operates I think some 13 courses, and the other 17 racecourse defendants operate the other 17 racecourses. I heard evidence from witnesses who are connected with six of the operators. They were RIL, the 6th defendant; Chester, the 12th defendant; Goodwood, the 13th defendant; Musselburgh, the 16th defendant; Newbury, the 17th defendant; and York, the 23rd defendant.

52. Although some of these witnesses dealt with the way in which the courses were involved in what has been described as collective selling of their LBO rights, the witnesses for Chester did not deal with that topic. That means that of the 18 racecourse operators, no one from 13 of those operators gave evidence as to how they came to be involved in, and the extent to which they were involved in, what has been described as collective selling.

53. At the close of the evidence, the parties' counsel prepared and exchanged lengthy written closing submissions. I will now turn to the written closing submissions on behalf of the claimants. They are very lengthy, but I will attempt to summarise the points which are important for present purposes.

54. Just above paragraph 36 of those closing submissions there is the heading, "The agreement was to fix prices." In paragraphs 36 to 39, the claimants identify the consequence of an agreement having the object of fixing prices. Putting it very simply, what the claimants were saying is if I find in this case an agreement with the object of fixing prices, that is a hardcore restriction on competition which is dealt with in a much more robust way than if one was dealing with an agreement which arguably had the effect of restricting competition in some other less hardcore way.

55. At paragraph 38 of the closing submissions, the claimants submitted this:

"The fact that this case concerns an agreement to fix prices is not now in dispute."

56. A reference is given to the transcript. I have looked at that reference to the transcript. I have been addressed upon it by Mr Green, and indeed by Mr Roth. I do not accept that there is a concession or an agreement that there was an agreement to fix prices. What was being said at the relevant page in the transcript is very far short of such a concession or agreement.

57. Moving on, at paragraph 47 the closing submissions for the claimants refer to advice given by Mr Swift QC, a topic to which I've already referred. It was pointed out that Mr Swift's advice did not concern price-fixing but collective exclusive dealing. At paragraph 48, Mr Green goes on to make the point that collective a priori price-fixing is something much more serious, and that is what he alleges has happened in this case.

58. He returns to the topic of price-fixing in a section of the closing submissions beginning at paragraph 153. That has the heading, "Price-fixing: the agreement was to fix prices and is thus prohibited by Article 81(1)". In the opening paragraphs of that section, Mr Green on behalf of the claimants stresses the severe line which ought to be taken in relation to an agreement which has the object of price-fixing.

59. At paragraph 158, there is then a reference to what is said to be the evidence, although part of it does not concern evidence but concerns submissions made by the defendants. Then Mr Green turns to suggested defences to the allegation.

60. The closing submissions also had a lengthy annex, which is annex 2, over some 15 or 16 pages, which I need not summarise. It goes into what is meant by price-fixing, and the attitude which a court ought to take when it finds it has before it an agreement with the object of price-fixing.

61. I can go, happily more briefly, to the defendants' written closing submissions. In paragraph 1 of those closing submissions, I find this, and I quote:

"The claimants' challenge is to the lawfulness of the Amrac licences pursuant to Article 81, on the basis that those licences are collective, exclusive and closed agreements which have the object and effect of restricting competition. The main thrust of the claimants' case as emerged during the trial is that the RUK courses entered into a price-fixing arrangement with the object of restricting competition. The claimants' skeleton paragraphs 20 to 21. It is contended that the agreement is therefore contrary to Article 81(1) on the basis of European Night Services, without any analysis being required of actual effect."

62. Beginning at paragraph 5 of the defendants' closing submissions, there is a discussion of what the defendants say is involved in a case where the object of the agreement is to fix prices. I need not read out very much of that. At paragraph 10, under the heading, "No basis for price-fixing allegation", the defendants submit that the arrangements entered into in this case are not to be characterised as arrangements with an object to fix prices.

63. On 17 June 2008, which was Day 24 of the trial, Mr Green began his closing submissions. At quite an early point in those submissions, I sought assistance from Mr Green as to what his case amounted to. In particular, I wanted to know precisely what agreement was said to be caught by Article 81 of the Treaty, who were the parties to the agreement, what were its terms and what were the consequences of the relevant agreement being declared to be void? If and insofar as Mr Green in his closing submissions wished to assert a horizontal agreement between racecourses, how was it that any such agreement which infringed Article 81, and was accordingly void, resulted in the vertical agreement between a racecourse and Amrac also being void?

64. In the course of Mr Green's answers to these questions, I suggested that the case he was advancing appeared not to have been pleaded.

65. On the next day, 18 June 2008, Day 25 of the trial, Mr Roth began his closing submissions. He made submissions to me to the effect that the claimants' pleaded case did not go so far as Mr Green was attempting to go in his closing submissions. These exchanges in court led to an exchange of correspondence between solicitors.

66. On 19 June 2008, solicitors for the claimants referred to the discussion as to the state of the pleadings. They asked the defendants to make it clear whether they intended to argue that the case of price-fixing by object, as it was put, had not been pleaded. The letter went on to say that if a point on the pleadings was to be made by the defendants, then the claimants would out of abundance of caution propose a draft amendment, and the letter set out a number of other contentions as to how a pleading point would be unjustified and would fail.

67. The response to that came on 23 June 2008 from the solicitors for the defendants. By this time, the defendants had received a draft of an amended particulars of claim, and the letter from the defendants' solicitors identified that the defendants would not object to certain limited parts of the proposed amendment, but would object to the remainder of the proposed amendment. The letter went on to make a number of points as to the basis on which the objection would be put forward.

68. While this debate in correspondence was going on, the court sat to hear all the closing submissions on the claim, on the counterclaim, and on the third party proceedings. When all those submissions were concluded, I then heard Mr Green's application on behalf of the claimants for permission to amend the particulars of claim, and that application was opposed by Mr Roth on behalf of the defendants. Although the application came right at the end of the trial, on the afternoon of 24 June 2008, Day 29, it is right to say it had been foreshadowed in the solicitor's letter of 19 June 2008, and Mr Green had produced a draft amended particulars of claim by 20 June 2008.

The proposed amendment .

69. With that understanding of the procedural history, I can now turn to the proposed amendment for which permission is sought. The proposed amendment is set out in a single numbered paragraph, but it runs to many pages. In the draft it has been called paragraph 27, but as there is already a paragraph 27; I will re-number it paragraph 26A.

70. In order to make my decision intelligible, I feel I need to refer to the draft amendment in some detail, but I will attempt to do this not by substantial quotation but by a precis, I hope accurately, of what is said in considerable detail in the proposed amendment. I need to read the opening words of what I am calling paragraph 26A, which are in these terms:

"For the avoidance of doubt, the reference in paragraph 26(a) above to collective licensing which prevented the individual racecourses from setting prices independently of one another, and in competition with one another, constituted collective price setting by the defendant racecourses inter se and/or the defendant racecourses inter se together with the first and fourth defendants, which falls within Article 81(1) as a restriction by object."

71. Paragraph 26A then has many subparagraphs given as particulars of what is called collective price, and I quote the word "setting" rather than fixing.

72. Subparagraph (a) pleads what might be a principle of law, but the thrust of it is that it is dealing within an agreement between one producer and another producer; in other words, a horizontal agreement. Subparagraph (b) makes a similar point of legal principle as to agreements between producers. Subparagraph (c) really cross-refers to or introduces what follows.

73. Subparagraph (d) is important, because it identifies alleged co-operation between the racecourses inter se in one of four different ways. Without reading out the entirety, what is alleged is an agreement between racecourses insofar as those racecourses came within a specific group; secondly, agreement between groups of racecourses; thirdly, agreement between negotiators for groups of racecourses; and then finally, collective agreement, and it is put this way, "in the forum of RUK", although that phrase might be said to lack come clarity.

74. Subparagraph (e) then seeks to identify facts and matters which support the contention of an agreement between racecourses. It refers to the claimants' closing submissions, and if that were the only point one would not welcome a pleading which referred to closing submissions, because the closing submissions of course are drafted in a style which is really incompatible with the function of a pleading. But I pass over that point and simply note that in these particulars in subparagraph (e), it is absolutely clear that what is being said is there was an agreement between racecourses, evidenced, it is said, in a large number of respects.

75. Subparagraph (f) takes the matter further. It builds on subparagraph (e), which referred to agreements between racecourses, and it now says there was agreement between racecourses and Amrac. In subparagraph (f)(ii), it is said that Amrac was inserted into the process of negotiation which was ongoing between the racecourses. It appears to be recognised by the pleader that if the whole object of this litigation is to strike down the licences granted to Amrac on the basis that there has been an agreement with the object of price-fixing, it is necessary, or at any rate desirable to have Amrac a party to an agreement with the object of price-fixing. Up to this point in the amended pleading, the agreement is between racecourses and now Amrac has been brought in as a party to something which is said to be a relevant agreement.

76. At subparagraph (g), there is a reference then to the individual licence agreements between the individual courses, operators and Amrac. It is then said that the object of these agreements is to fix prices, and the consequences are that it is a hardcore restriction on competition, which is dealt with in a more severe way than in other respects.

77. I ought to refer specifically to subparagraph (l), where the consequences of the agreement of concerted practice are said to be twofold. The first is that the agreement between the racecourses inter se and the agreement between the racecourses and, for example, Amrac, are void. But secondly, and perhaps significantly, it is said that the LBO licences, which it will be remembered were concluded between a racecourse operator on the one hand and Amrac on the other, they also are void.

78. That is the end of paragraph 26A. I should add that there is no change to the prayer for relief, which claims in a somewhat general way a declaration that the collective exclusive licensing on a closed basis of the LBO rights is contrary to the relevant prohibitions.

79. I can comment on the proposed amendment as follows. These new paragraphs now clearly plead horizontal agreements between racecourses. In fact they plead a number of different horizontal agreements; see subparagraph (d) of 26A.

80. It is also clearly pleaded that the object of these horizontal agreements was to fix prices. It is pleaded that Amrac was a party to such an agreement. I refer to the phrase "inserted into the process of negotiation". It is said that the agreement to which Amrac was a party was itself an agreement, the object of which was to fix prices, and I have referred to the alleged consequences which include the consequence that the licence of LBO rights to Amrac are void.

The essential submissions on this application .

81. Mr Green for the claimants says that the amendments do not allege anything, or anything very significant which was not originally alleged. He says that strictly speaking he does not need to trouble to amend, although the amendment might be useful by way of clarification of his case, but it is not an attempt to expand his originally pleaded case.

82. Alternatively, Mr Green submits that he should have permission to amend. The draft amendment is in accordance with the way he opened the case; the defendants have always known that this was the case they had to meet. They have attempted to meet it with the evidence they wanted to call, and the submissions they wished to make. The court should rule on the real dispute between the parties. The defendants took no pleading point at the outset of the trial.

83. I suppose Mr Green would say that if the defendants had taken a pleading point at the outset, the claimants could have applied to amend at that stage, and permission to amend would have been given. On this alternative submission, if the claimants need to amend and they are not permitted to do so, they will suffer significant prejudice. Conversely, the amendment will cause no relevant prejudice to the defendants, as the amendments merely record the real case which the defendants have always known they were expected to deal with.

84. Mr Roth submits that the proposed amendment is a major change to and a major expansion of the original pleaded case. Although Mr Green used the term "price-fixing" in his opening, that was because, and was understood by the defendants to be because, Mr Green was attaching the label "price-fixing" to collective exclusive selling, which the claimants had indeed alleged had occurred in this case. That was the case which the defendants through Mr Roth were seeking to address when he made submissions as to why a case of collective selling, if the present is such a case, was not a case of an agreement which had the object of price-fixing.

85. Mr Roth submitted that Mr Green needed permission to amend if he was to expand the claimants' case in the way proposed, and that the court should not grant permission to amend. The application was made too late, after all the evidence had been given, and if permission were now to be granted it would be necessary for the defendants to defend the new allegations and that would, or probably would, require the defendants to prepare witness statements from witnesses already called and from yet further witnesses, for example, from racecourse operators who had not previously given evidence of their own.

Discussion as to the meaning of the original and of the draft amended pleadings .

86. To enable me to choose between the rival submissions, I need to analyse the case which was originally pleaded. In particular, I need to focus on what the original pleading identified as the agreement or agreements which infringed Article 81 and which were said to be void under Article 81(2), who in particular were the parties to those agreements. Paragraph 20 of the original pleading refers to the RUK agreements, the Amrac agreement and the Amrac licences. Paragraph 21 refers to something which is defined as "the concerted practice". It is those three classes of agreement and that practice which are referred to in paragraph 26 as having the object of restricting competition. The RUK agreements are defined at paragraph 7 of the original pleading. They are agreements, that is in the plural, between racecourses on the one hand and RUK. There is nothing in paragraph 7 of the original pleading which would lead one to conclude that the agreements being referred to are horizontal agreements between racecourses.

87. The Amrac agreement is referred to in paragraph 19(d) of the original pleading. It is not absolutely clear what agreement is being referred to. It seems to be the intention to refer to an agreement which was entered into in or around December 2006, which agreement led to the Amrac licences on 31 January 2007. In any case, as pleaded, the Amrac agreement has on the one side Amrac and, on the other, the RUK racecourses acting through RUK. This is a vertical agreement between courses and Amrac. It is not a horizontal agreement between courses.

88. The Amrac licences are also referred to in paragraph 19(d) of the original pleading. It is clear that the licences are vertical agreements between the courses and Amrac, they are not horizontal agreements between courses.

89. Paragraph 20 of the original pleading pleads that the vertical agreements which I have referred to are individually or collectively contrary to Article 81 because they provide for or give effect to what is called collective exclusive licensing. The word "collective" seems to refer to the fact that the courses acted collectively, but without in terms asserting there was a prior agreement to act collectively and, if so, what the terms of that agreement, which would be a horizontal agreement, might be.

90. Paragraph 21 of the original pleading asserts "the defendants or some of them" participated in a concerted practice. It is said that they, which must mean the defendants or some of them, sought to procure, facilitate and/or give effect to the exclusive licensing of the relevant rights to Amrac. If all of the defendants had been racecourses, then this plea would lead one to suppose that what was being alleged was a concerted practice operating horizontally as between racecourses. However, not all of the defendants are racecourses. The defendants include Amrac. Indeed, Amrac is the first defendant. Therefore it is much less clear that paragraph 21 is trying to describe a concerted practice between racecourses or conceivably some only of the racecourses, to which Amrac might also or might not be a party.

91. The result of this analysis is that the wording of paragraphs 20 and 21 of the original pleading lacks precision and is open to interpretation. However, paragraphs 20 and 21, which allege breach of Article 81, are helpfully followed by paragraph 22, which states that the particulars of the breach are set out at paragraphs 26 to 30. Accordingly, one turns to those paragraphs, and for present purposes to paragraph 26, to discover what the pleader is referring to. I have already read paragraph 26 of the original pleading. It refers to the three classes of agreement which are all vertical agreements, and the pleaded concerted practice which provide for or give effect to collective exclusive selling. If, on the facts, the selling was collective, then the vertical agreements do indeed "provide for" (especially the pleaded RUK licences) or "give effect to" (especially the Amrac agreement and Amrac licences) collective selling. Accordingly, the opening words of paragraph 6 do not yet bring in any allegation that there was a horizontal agreement between racecourses which infringed Article 81.

92. At this point, subparagraph (a) of paragraph 26 needs to be considered. It is there asserted that collective exclusive selling prevents the individual racecourses from acting individually, and, in particular, agreeing terms individually, and, further, agreeing prices individually. Of course, once a racecourse has granted exclusive rights, it is no longer able to grant any rights to another grantee and there no point in negotiating to grant rights to another grantee. I do not think, however, that subparagraph (a) is meant to be confined to a reference to the consequence of the grant of exclusive right. It can be read as referring also to the period of negotiation before the grant of exclusive rights.

93. So what is being said, although very far from clearly, is that the process of collective selling prevents a racecourse from selling individually even before the grant of exclusive rights. But a racecourse would only be prevented from selling individually if it had agreed with someone that it would not sell individually. But who is the someone with whom the racecourse allegedly has agreed not to sell individually? Is it an agent, RUK, who might have been acting for a number of principals and whose role as agent would be undermined if a single racecourse's principal began to negotiate individually? Or is subparagraph (a) intended to allege that the racecourses have agreed between themselves that they will act together as collective sellers and will not seek to negotiate individually?

94. Although subparagraph (a) is very far from being well expressed, if it were intended to allege that there was an agreement or a practice between racecourses, operating at a horizontal level, which bound them to act collectively and prevented them from acting individually, nonetheless I think I should reach the conclusion that the pleading is indeed making that limited allegation of a horizontal agreement of that type. In my judgment, it is open to the claimants as a result of paragraph 26 (a) to argue that there was an agreement or a practice between racecourses operating at the horizontal level which restricted the conduct of racecourses in that it prevented them from negotiating individually. It is open to the claimants on the original pleading to argue that such a restriction is a restriction on competition, contrary to Article 81. Further, in view of the fact that paragraph 26 deals with restrictions by object, it is open to the claimants on the original pleading to argue that such a restriction is a restriction by object.

95. It is also open to the claimants to argue that such a restriction by object is properly to be regarded as a restriction which has the object of fixing prices. I add the last sentence not because that allegation is specifically pleaded, but because Mr Green in his opening submissions asserts that collective selling necessarily involves the object of price-fixing. Mr Roth accepts that that allegation is one which the defendants have to deal with.

96. Having described what is open to the claimants to argue on the original pleading, I stress I do not indicate one way or the other what my views will ultimately be in relation to those arguments.

97. Having considered what was originally pleaded, and having taken some care to identify whether there was to be found an allegation of a horizontal agreement between racecourses and, if so, what the extent of that horizontal agreement was, I now need to consider whether the allegations in the amended pleading are another way of saying the same thing or much the same thing as the original pleading. In my judgment, it is plain that they are not. The amended allegations make a large number of allegations of horizontal agreements between racecourses. Those allegations go well beyond my interpretation of what one can get out of the original pleading. It follows that, if permission to amend is refused, then the claimants will not be able to advance at this trial a claim to relief based on the different horizontal agreements to which the draft amendments refer.

Should I grant permission to amend?

98. It is accepted that I have power to grant or withold permission to amend the particulars of claim. I have what might be called a discretion, but of course that discretion must be exercised in accordance with principle and in accordance with any settled practice of the courts in this respect and also judicially. The notes in the White Book refer to three unreported decisions of the Court of Appeal dealing with late applications for permission to amend a pleading. These are, in date order, Cobbold v London Borough of Greenwich , 9 August 1999; Kelly v Chief Constable of South Yorkshire , 2001, EWCA Civ 1632; and Hall v Bolton Metropolitan Borough Council [2001], EWCA Civ 1717.

99. The first of these cases concerned a proposed amendment just before the trial, the third of these cases concerned an amendment during the trial, and the second of these cases concerned an amendment at the end of the evidence. In all three cases, as it happened, the amendment was permitted. I have looked to see what guidance I can get from the judgments given in those three cases. It is not necessary for present purposes to refer to the facts of the three cases, which are very far away from the facts of the present case. In the Cobbold case, the court consisted of Lord Justice Peter Gibson and Lord Justice Sedley. The judgment was given by Lord Justice Peter Gibson, and Lord Justice Sedley agreed. Lord Justice Peter Gibson said this, and due to its importance, I will read it:

"The overriding objective is that the court should deal with cases justly. That includes, so far as practicable, ensuring that each case is dealt with not only expeditiously but also fairly. Amendments in general ought to be allowed so that the real dispute between the parties can be adjudicated upon, provided that any prejudice to the other party or parties caused by the amendment can be compensated for in costs, and the public interest in the efficient administration of justice is not significantly harmed. I cannot agree with the judge when he said there would be no prejudice to Greenwich in not being allowed to make the amendments which they are seeking. There is always prejudice when a party is not allowed to put forward his real case, provided that that is properly arguable."

100. In the Kelly decision, the court consisted of Lords Justice May, Sedley and Rix. Lord Justice May delivered a detailed, reasoned judgment dealing with the specific circumstances of that case. I do not go to any particular passage in that judgment. I go to a passage in the short judgment given by Lord Justice Sedley. It is paragraph 21 of the judgment, and it is in these terms:

"It is not uncommon for a version of the facts to emerge as a possible deduction from the evidence, which has so far been neither side's pleaded case but which one side wants now to plead as an alternative basis, either of liability or of defence. In my experience, it is normal and proper practice in the county courts and in the High Court too, to allow an amendment to such effect at the conclusion of the evidence, if, on any terms which are appropriate as to costs or recall of witnesses, this can be done without injustice to the other party or parties."

101. I should comment briefly on that paragraph in Lord Justice Sedley's judgment. He refers there to a version of the facts emerging. That was appropriate, given the facts of the Kelly case itself. It is not, however, what has happened in this case. Our case is not to be compared with Kelly on the particular facts.

102. Secondly, Lord Justice Sedley refers to terms as to the recall of witnesses. I do not read that as meaning that the court should be relaxed as to a development in a trial which involves a trial being reopened and witnesses being recalled, much less new witnesses called. Lord Justice Sedley's reference to the recall of witnesses is all qualified by the words "if this can be done without injustice to the other party". It is the justice to the party against whom the amendment is being pressed which is of great significance, and in that regard, a suggested need to recall witnesses or to call further witnesses would in my judgment normally weigh as a consequence severely to be avoided.

103. The third case is Hall v Bolton Metropolitan Borough Council , and although I have read the judgments in that case, it is not necessary to refer to any passage in those judgments.

104. I will now seek to apply those statements of principle to the particular facts of this case. If I refuse permission to amend, I will thereby prevent the claimants from putting forward the wide case based on alleged horizontal agreements between racecourses which they now wish to put forward. If that wide case were to be put forward and then to fail, the refusal of permission to amend would not of course cause the claimants any prejudice, but of course if the wide case were to be put forward and were to succeed, and if the claimants were otherwise to fail in their claim, the refusal of permission would cause great prejudice to the claimants.

105. I do not know, and the claimants do not know at this point what the various outcomes will ultimately be. I have to proceed on the basis that if I deny the claimants the ability to put forward the wider claim, and that claim cannot be regarded here and now as hopeless, then that will be prejudice to the position of the claimants. That is essentially the point made by Lord Justice Peter Gibson in the Cobbold case.

106. I now have to consider possible prejudice to the defendants. In considering prejudice to the defendants, I do not ask myself whether the defendants will be prejudiced if permission were to be given and the wider claim were to succeed. Instead I ask myself whether the defendants will suffer prejudice by reason of the fact that the wider claim was not pleaded at a much earlier point in time and is only now being brought into the case.

107. I also have to ask myself whether any prejudice to the defendants can fairly be compensated by an appropriate order as to costs. For this purpose, I do have to form some sort of view as to the practical consequences for the defendants in terms of the need or possible need to prepare further evidence and call further witnesses. Mr Roth submits that more evidence will be needed to meet the wider claim if permission is granted.

108. I have not felt it appropriate to accept Mr Roth's statement at face value without investigating the matter for myself. In order to test that submission, I have myself examined the witness statements which have been served on behalf of the defendants. Having conducted that exercise, I feel that it is highly likely that if I give permission to amend, the defendants will indeed want to call further evidence. If they do wish to call further evidence, it is a case where the court would be prepared to let the defendants call further evidence. The wide allegations of various horizontal agreements between racecourses which are now being put forward by the claimants in their draft amendments have not been fully, or even adequately, dealt with in the evidence already served by the defendants. Further evidence is likely to involve evidence from new witnesses and the recall of witnesses who have already given evidence and have been cross-examined.

109. Accordingly, there will be a real disadvantage to the defendants if I give the claimants permission to amend. There will be additional costs in preparing evidence. That cost could have been saved or reduced if the preparation of this evidence was done as part of the overall preparation of the case. The hearing will have to be reopened for the further evidence to be led and cross-examined. There will have to be further closing submissions. The costs to the defendant will be increased over what they otherwise would have been.

110. Of course, I must take into account the possibility that any further costs can be compensated for by an appropriate order for costs. It may be possible to separate out the additional costs and award them to the defendants, but the position would not be straightforward.

111. I turn therefore, to a further consideration, and that is delay. The preparation of further evidence and the reopening of the trial would involve delay in the determination of this dispute. It is difficult to judge precisely what that delay might amount to. If the trial is not reopened, there is a good chance that judgment will be given this term, that is before 31 July 2008. If further evidence has to be prepared and the trial reopened, I think it will be necessary to fix a hearing next term, starting 1 October 2008. I have been told on a number of occasions during the trial there have been and are real difficulties in getting dates which are convenient to counsel to appear in this case. If the trial begins after 1 October 2008, judgment will be given at some indefinite date thereafter.

112. In relation to delay, it will be remembered that the court was asked to order an expedited trial, and the court did so. I have looked at the submissions made to Mr Justice Lindsay as to why it was important to the parties to have this case heard in advance of other litigants in the queue. I have already expressed the view that it is important to, amongst others, the defendants, to have the status of the various licences determined without inappropriate delay. I conclude that delay in the determination of this dispute will be severely prejudicial to the defendants.

113. I also need to consider the point that Mr Green opened his case by asserting that the racecourses, and he would say Amrac, were guilty of price-fixing. He says that the claimants wish to amend their pleading to allege price-fixing. He says there was no pleading point taken against the claimants when they originally alleged price-fixing. He would say it would be unfair to the claimants to allow the defendants now to take a pleading point to defeat the case of alleged price-fixing.

114. What Mr Green's submission ignores is the point I have already made, to the effect that the original pleading does allow the claimants to allege a horizontal agreement between racecourses, and does allow Mr Green to submit to me that that agreement was a restriction on competition by object and that the object was to fix prices. What the amendments seek to do is to make a much wider allegation of price-fixing pursuant to a series of alleged horizontal agreements which are being pleaded for the first time. Just because -- rightly or wrongly remains to be determined -- Mr Green attached the label "price-fixing" to the limited horizontal agreement between racecourses, that one can, although not easily, spell out of paragraph 26(a) of the original pleading does not in my judgment justify Mr Green advancing any other case of price-fixing based on a series of unpleaded horizontal agreements between racecourses.

Conclusion .

115. In my judgment, applying the principles which I have taken from the decisions of the Court of Appeal to the particular facts of this case, I conclude that in order to do justice between these parties, I should refuse permission to the claimants to amend their pleading in the way proposed. This conclusion is subject to the point that the defendants do not object to a limited part of the proposed amendment, the purpose of which, if the amendment is so confined, will be to offer clarification of the original pleading. It may be that the limited amendment is unnecessary in view of my conclusions as to what is the meaning of the original pleading, but as there is no objection to that limited amendment, if the claimants still wish to make a limited amendment of that kind, I will give them permission to make it.