Daimler AG v Walleniusrederierna Aktiebolag & Ors

Introduction

The parties appear before me today on the first case management conference. The first matter that arises for consideration is the application of the defendants for a split trial of issues going to liability and quantum against the Claimant (“the Split Trial Application”). The Split Trial Application is opposed by the Claimant which submits that the action can be tried most expeditiously and fairly by one trial of all issues as to liability and quantum.

There are further live issues before me for determination in relation to pre-trial case management directions which I will identify at this point because some of them are of relevance to the Split Trial Application before me:-

The Claimant (“Daimler”), represented by Brian Kennelly QC and Philip Woolfe is a company that manufactures and distributes passenger cars, vans, trucks and buses. It also purchases international shipping services for roll-on roll-off cargo (“RoRo Services”). The Defendants are companies which provide, inter alia, Ro-Ro services.

Following several settlements, the remaining Defendants are the Third to Seventh Defendants (“the WWL Defendants”) represented by Joshua Holmes QC and William Hooper, the Eleventh Defendant (“NYKE”) represented by Marie Demetriou QC and Daniel Piccinin, and the Twelfth Defendant (“CSAV”), represented by Sarah Abram.

Daimler claims damages to compensate it for loss that it allegedly suffered as a result of the Defendants' participation in what it says was a serious price fixing and market sharing cartel relating to the provisions of Ro-Ro services contrary to EU/EEA competition law, and alleged infringements of Article 101 TFEU and Article 53 EEA. The alleged infringements comprise agreements between the Defendants allegedly restricting competition to supply international shipping services for Roll-on Roll-off cargo (“the Alleged Unlawful Agreements”).

In 2018 the European Commission (“EC”) published a decision in case AT.40009 Maritime Car Carriers on 21 February 2018 (“the EC Settlement Decision”) which found that certain undertakings involved in the provision of Ro-Ro services had infringed EU/EEA competition law (Article 101(1) TFEU and Article 53(1) EEA) and imposed fines and other sanctions in respect of that breach.

As to the nature of the wrongdoing, the EC found, amongst other things, that "the parties applied the rule of respect as a guiding principle for their practices" on various routes worldwide including the EEA; that there was an "overall scheme pursuing a single anti-competitive object and single anti-competitive aim of restricting price competition"; that this was "structured around the 'rule of respect' involving 'a combination of multilateral and bilateral contacts'"; and the parties "knowingly substituted the risks of competition between them for practical co-operation"; such "behaviour [having] all the characteristics of an 'agreement' and/or 'concerted practice'” within the meaning of Article 101 TFEU and Article 53(1) EEA.

The settlement decision was addressed to various entities within WWL, NYKK and CSAV, amongst others, who settled the investigation by admitting to participating in unlawful cartel conduct. The conduct admitted was a single and continuous infringement of EU/EEA law from 18 October 2006 to whatever date is set out in the EC Settlement Decision. NYKE is not an addressee of the EC settlement decision. It is a subsidiary of NYKK.

The EC Settlement Decision deemed the start date for the infringement to be 18 October 2006. Prior to that date, tramp vessel services were expressly excluded from the scope of the EU/EEA competition rules (Regulation (EEC) 4056/86 Article 1 at subparagraph (2)). By choosing that start date, the EC did not need to examine whether the Ro-Ro services covered by the EC Settlement Decision were tramp shipping services or not. An issue in the present action is whether the services were tramp shipping. It was stated that therefore "in order to reflect [this] jurisdictional change, the conduct is deemed to have started for all parties on 18 October 2006" (Recital 42 EC Settlement Decision).

Daimler alleges that there were unlawful agreements and/or concerted practices in place which had as their object and/or effect the prevention, restriction or distortion of competition for Ro-Ro services in various places, including the EEA, by (i) coordinating prices for Ro-Ro services, (ii) rigging bids for Ro-Ro services, (iii) allocating customers for Ro-Ro services, (iv) restricting capacity for Ro-Ro services and (v) sharing commercially sensitive pricing information regarding Ro-Ro services.

Daimler claims that these alleged unlawful agreements encompassed Ro-Ro services on various routes around the world, including but not limited to routes between ports in the EU/EEA. A proportion of Daimler's claim relates to Ro-Ro services between non-EEA ports (e.g. shipping cars from Tokyo to Sydney ("non-EEA services")). Daimler also says that these alleged unlawful arrangements were in place from at least February 1997 (in the case of CSAV from at least January 2000) to at least 7 September 2012 (“the Alleged Relevant Period”).

Daimler claims damages in respect of Ro-Ro services which Daimler and its relevant subsidiaries purchased during the Alleged Relevant Period. There are two primary heads of loss presently claimed: (1), overcharge losses estimated by Daimler at US$187 million or above, and (2) loss of profits/increased borrowing costs estimated by Daimler, also at US$187 million or above. The total value of the claim (including interest) is in excess of US$374 million.

There are two aspects of the overcharge losses:

In seeking to establish the Defendants' participation in the price fixing cartel, and the start date of the cartel, Daimler relies on, amongst other matters:

The WWL Defendants, NYKE and CSAV deny liability and join issue on the quantum of the claim. Their contentions can be summarised as follows: -

The issues between the parties are further set out in the agreed list of issues to which I have had regard.

Daimler's claim was issued on 1 August 2018. It took considerable time to serve the claim on CSAV. Daimler was granted permission to serve proceedings out on CSAV in Chile on 18 December 2018 and had served them by 29 November 2019 following several extensions of time for service.

Several of the Defendants are no longer parties to this action, having settled their claims with Daimler, namely MOL (Europe Africa) Limited, Mitsui OSK Lines Limited, Kawasaki Kisen Kaisha Limited, K Line Holding (Europe) Limited, Nippon Yusen Kabushiki Kaisha, and K Line Europe Limited.

On 14 and 15 November 2019 I heard the applications of WWL, NYKE and CSAV seeking variously, in relation to part of the claim, summary judgment or a reference to the CJEU and a stay of that part of the proceedings. In this regard:

At the same hearing I considered that a stay of the proceedings pending determination of the preliminary reference was not appropriate. Whilst making clear that my findings did not impinge upon the case management decisions to be made by the judge at the envisaged first CMC, i.e. today's hearing, my reasoning on the issues that arose included at [125] and [136]:

On 2 January 2020 the WWL Defendants issued contribution claims against CSAV, NYKK and NYKE (NYKK, as already noted, being the Japanese parent company of NYKE). On 14 January 2020, Butcher J granted the WWL Defendants permission to serve those claims out of

Between 17 January and 21 January 2020, the WWL Defendants, CSAV and NYKE applied for an order that there be a split trial of liability and quantum. This CMC was first listed for 3 February 2020, but the parties failed to comply with the provisions of the Commercial Court Guide in relation to heavy applications and the time for lodging skeleton arguments, as a result of which the hearing was removed from the list. It proved possible, however, for the Court to relist the matter in short order today once the parties had complied with their obligations. A further one-day CMC is envisaged in May 2020.

I take the opportunity to remind parties of the importance of complying with the provisions of the Commercial Court Guide in relation to heavy applications. The timescales there envisaged apply to all such hearings. In future, parties may well face adverse cost orders and may also find that it is some time before the matter can be relisted if the Guide is not complied with.

Daimler filed its disclosure report on 20 January 2020 pursuant to CPR Rule 31.5(3). This was more than 14 days before the date of the first CMC. The WWL Defendants, NYKE and CSAV served their disclosure reports late, on 23 and 24 January 2020. This was in breach of CPR Rule 31.5(3) which requires parties to file and serve disclosure reports not less than 14 days before the first case management conference. The Defendants' disclosure reports also relate only to issues of liability and not quantum. The parties have not yet exchanged electronic document questionnaires, nor in the context of their application for a split trial have the Defendants fully engaged in Daimler's proposals for directions to trial. This is disappointing given the overall purpose of the case management conference. It appears that the context in which they have not done so is their focus upon their application to have a split trial of liability and quantum to which I will now turn.

The Law relating to the Split Trial Application

The court's power to order a split trial is part of its general powers of case management set out in CPR Rule 3.1. CPR Rule 3.1(2) specifically provides that the Court may:

In the competition context the leading cases are Leaflet Company Limited v Royal Mail Group Limited [2008] EWHC 3514 (Ch), [2009] UKCLR 323, and Electrical Waste Recycling [2012] EWHC 38 (Ch). Electrical Waste Recycling was recently applied outside of the context of competition law by Norris J in Hook v Sumner, 9 November 2016, unreported at [49] and following.

In Electrical Waste Recycling, Hildyard J provided guidance in the form of a non-exhaustive list of relevant factors to take into account in considering whether to split the trial at [6]. The bracketed comments which follow are my own:

The judge must undertake a "pragmatic balancing exercise" which requires assessing "how a case is likely to unfold according to whether or not there is a split" (Electrical Waste Recycling at [7]).

If a split trial is ordered it is important that there should be a careful demarcation of the boundary between the two in terms of the issues to be dealt with at each stage- see Electrical Waste Recycling at [9], and with regard to factor 4, one example of the "excessive complexity" that a single trial can lead to is where a large number of possible permutations of loss and damage may arise depending on the judge's conclusions as to liability - see Leaflet Company at [7]:

The Chancellor in that case also noted that "the issues on infringement are heavy enough without adding evidence on damages based on a large number of hypotheses".

Further, the Court's power under CPR Rule 3.12(i) to direct a split trial must be exercised in accordance with the overriding objective in each case. Relevant considerations under CPR Rule

include "ensuring that the parties are on an equal footing", "saving expense", "ensuring

Relevant considerations under CPR 1.4, in addition to those set out previously by Waste Recycling at [6] include giving directions to ensure that the trial of a case proceeds quickly and efficiently and the importance of the court dealing with as many aspects of the case as it can on the same occasion.

Factor 6 feeds into multiple other factors. If the issues cannot neatly be demarcated, this places a greater burden on witnesses in many cases where they will be required to give evidence at both trials and it is also a significant disadvantage in terms of trial preparation and management. In particular it can mean that parties are allotted more than an appropriate share of the Court's resources.

Application of the law to the facts of the Split Trial Application

The Defendants make two proposals, in the alternative, for the way in which the trial could be split: (1) The First Proposal: Issues 1-17 from the Agreed List of Issues (“Issues relevant to liability”) should be determined at the liability trial; the remaining issues (“Issues relevant to causation and quantum of loss”) should be tried at the quantum stage. I should note that the above division of issues was not made clear in the application notice, which only refers to “Issues [XX-XX] be tried first in the liability trial, and Issues [XX-XX] be tried second in the quantum trial”: the division proposed appears from the witness statements and skeleton arguments the Defendants served in support of the application. This may be because the Defendants’ Application notices were served between 17 January 2020 and 21 January 2020 whilst the Agreed List of Issues is dated 28 January 2020.

I deal with each proposal in turn.

I address the issues that arise in the parties' respective arguments in detail below. However, for the reasons that I will elaborate upon, and articulate as I address the parties' submissions, I am in no doubt that applying the factors identified above in Electrical Waste Recycling, the overriding objective is best furthered by one trial of all issues and that a split trial would only be likely to result in delay, increased expense, and result in the overuse of scarce judicial resources.

In particular: -

A clean split?

The Defendants argue that the division of issues is straightforward. Issues 1 to 17 would be determined at the first trial and Issues 18 to 27 would be determined at the second trial. Daimler contends that issues of causation and quantum cannot cleanly be separated from liability because in order to prove its case that there was a worldwide cartel between 1997 and 2012, Daimler will need to rely on both contemporary documentary evidence and expert evidence in respect of pricing. In order to obtain this economic expert evidence, Daimler contends that it would need disclosure of documents and matters that go to causation or quantum: namely, the effect that the cartel had on prices for Ro-Ro services. Mr Kennelly also draws my attention to the way Daimler pleads its case, including the fact that it pleads that there was an overall respect agreement which applies across the world and across the services.

In my view, there is not a clean split between evidence that must be adduced to determine issues of liability and issues of quantum. In any event, in the context of a case in which the precise contours of contemporary documentary disclosure have not yet been drawn and I do not consider that it would be appropriate to make a case management decision on the assumption that there will be no expert evidence in relation to the determination of liability as well as quantum. As is common ground, pursuant to CPR Rule 35.1, the Court may permit expert evidence which is "reasonably required to resolve the proceedings".

In my view, there is scope for economic evidence which Daimler wishes to adduce as to the effect that the cartel had on prices for Ro-Ro services. Certainly, such evidence would be admissible at trial because at its lowest it is relevant to the question of whether the Defendants committed infringements in respect of the period before October 2006. The extent to which it will be reasonably required will depend on the extent of disclosure that is given and the available documentation, but I consider it likely that it will be reasonably required and that the trial judge will be assisted by it. Certainly, I consider that it is appropriate for me to proceed on the basis that it may well be reasonably required and that therefore there will be expert evidence in relation to both liability and quantum.

Expert evidence based on cartel pricing is capable of being helpful to the court in determining whether there has been a cartel infringement. In this regard, put at its highest, the Defendants' case is that there is no case in which liability has been determined purely by reference to pricing effects and economic analysis, and that the Commission normally uses contemporaneous documentary evidence and admissions to prove infringement. That is of course correct. However, it is also clear that economic analysis can be used to establish that there has been infringement. Economic evidence may be resorted to in order to establish that a prior concentration took place between competitors where that cannot be established through material evidence of actual contracts and it may be a type of corroborating material or it may be useful in evaluating the strength of the documentary material. This is particularly so if there are gaps in the documentation. In case C114/85 Re Wood Pulp [1993] 4 CMLR 407, the CJEU annulled the Commission's decision on the grounds that the parallel conduct by itself could not provide concentration because collusion was not the "only plausible explanation". Therefore, if the only evidence of concentration is pricing data, and collusion is the only possible explanation, then that pricing data is probative as to whether there has been a breach.

Further, there is a heightened likelihood of such expert evidence being required in this case. Daimler makes the point that contemporaneous documentary evidence may be lacking, and witness evidence may be more difficult to obtain, in the context of a long running cartel, and as I have already noted, there is already some material before me in that regard to the effect that disclosure in terms of documentation for the early period may be patchy, and Mr. Noble (Daimler’s economics expert) states that there may not be contemporaneous communications for each and every route that was affected by the cartel. It is just that sort of situation where expert evidence may be reasonably necessary to assist the Court.

It was put to me in oral submissions by counsel for NYKE that Daimler seeks to rely on the EC Settlement Decision and various foreign regulatory materials to establish or reveal good evidence of a global cartel, and will therefore not need any expert pricing evidence. However, the Defendants do not agree that those regulatory materials establish what Daimler alleges in a root-and-branch attack on liability and in circumstances where full disclosure has not yet been given of those regulatory findings it is difficult to reach firm conclusions as to how much reliance could be placed upon them by Daimler to the exclusion of expert pricing evidence. Furthermore, there is some overlap between issues of quantum and liability on different routes. It is Daimler’s case that there was a global cartel on the basis of a single agreement governing how the cartelists operated worldwide. Therefore, even if Daimler cannot claim damages in respect of certain routes because they are barred from doing so by, for example, the German law of limitation, what happened on the barred routes may well remain probative as to what happened on the routes pursuant to which Daimler can still claim damages.

Even if it could not be said definitively at this point in time that Daimler will "need to adduce expert evidence on pricing effects and economic analysis", I do not consider that this is a factor which points particularly towards a split trial in the context of the issues that I have already identified: -

I cannot lose sight, in this regard, that there has been something of a lack of engagement by the Defendants with the disclosure exercise to date, in circumstances where the necessity or lack thereof of disclosure from the Defendants on the effect of the cartel on prices is a central pillar of their argument that a split trial is a more efficient way of dealing with the issues. Ultimately the utility of such evidence, will be a matter for the trial judge. But I consider that this is a factor which I should take into account when adopting a pragmatic approach and weighing the pros and cons of a split trial versus a full trial. In that regard, and although I cannot say with certainty that the trial of all issues will benefit from expert evidence in relation to liability, even on the material currently before me, it seems likely that it will be reasonably necessary. Certainly, it will be necessary on this CMC to consider whether it is appropriate at the present time to make such an order. That may be the case (or may well be a matter for consideration at a subsequent CMC if not ordered at this CMC).

Savings as to Time and Expense

The Defendants have argued that a split trial would lead to significant cost savings in potentially cutting down the cost of the quantum investigation primarily by excluding certain temporal and geographical parts of the Defendants’ liability to the claimant. Specifically, the following possibilities were noted:

The Defendants note that there are therefore a large number of different permutations and possible outcomes which affect the period for which the Defendants may be held liable and the range of routes in which such liabilities may be found. Therefore, the Defendants argue that determining some of these issues in a split trial would lead to savings in three main areas:

Daimler argues that a liability trial would not produce significant cost savings overall. This is essentially for two main reasons. Firstly, the collection of data for the purposes of quantum is not determined by the scope of the liability trial, and secondly that a clean split between liability

In my view, a liability trial would not produce significant savings as to the amount of disclosure required, the number of permutations which the experts must consider for determining quantum, or in the total amount of court time used. I identify below seven reasons why I consider this to be so.

Firstly, whatever the outcome on particular liability issues raised by the Defendants, there is no possibility, absent settlement, that a further trial on quantum will be unnecessary. Approximately 54% of the volume of commerce is in follow-on damages pursuant to infringements identified in the EC Settlement Decision which the Defendants accept occurred. Therefore, liability is not in issue in relation to such (potentially very substantial) damages. It is, at least at first blush, somewhat unattractive, given such admitted breaches, that the determination of quantum in respect of these breaches would be deferred for some considerable time, potentially at least three years or even up to five years from the commencement of the proceedings. This also means that I am not weighing the possibility of no trial at all on quantum issues depending on the outcome of a liability trial. The split trial proposal will delay the determination of certain quantum issues that will have to be determined anyway and will result, therefore, on any view, in two trials absent settlement.

Secondly, the defences presented by most of the Defendants do not amount to a finding that there was no price fixing or market sharing cartel in the period from 1997. The Defendants may fail in relation to the liability issues they raise at the first instance trial. Given this possibility, it makes little or no sense for the Court not to be determining at the same liability trial the questions that arise as to whether in fact a cartel was operating in respect of such a time and such routes. Put another way, it cannot be assumed that the Defendants will succeed in respect of their discrete liability points. If they fail on such points, the issues as to whether there was collusion and price fixing would be determined for all time periods and all routes at the liability hearing.

Thirdly, it is likely that data from the periods in question will in any event be relevant when considering the quantum of overcharge. Such periods may be taken into consideration either as providing "clean data" from before the cartel infringement, or as evidence of collusion and operation of the cartel if Daimler wins the liability issues. In this regard:

Fourthly, as I have already identified, I also consider that expert evidence on such matters in terms of price fixing is admissible and may be reasonably necessary when considering at the liability stage whether there was collusion on pricing at particular points in time and on particular routes. One difficulty is that disclosure has not yet taken place and it is not yet clear what disclosure there will be in respect of the early periods of time, although, as I have already identified, Mr Holmes identified that data may be patchy in terms of documentation for earlier periods. That accords with what one might expect, that there might be less disclosure for earlier periods due to historic loss of documentation with the passage of time or changing or archiving of any systems that were in place. Of course, since the allegations were made, no doubt appropriate measures are in place to protect such documentation as still exists. If that is the case, however, and there are gaps in the material, expert evidence based on price comparison may well have a role in supplementing and filling the gaps, and in that context such documentary evidence as exists may not provide the whole picture even if all the disclosure is given.

Fifthly, it is said on behalf of the Defendants that there would be savings in expert evidence in a split trial as the expert would not have to consider each possible permutation on liability. Set against that is the evidence of Mr Noble where it appears from his evidence that different calculations of loss for each period essentially amount to the running of a different set of data through the same economic model. On the basis of his evidence it would not appear to be unduly onerous for such a model to run for different periods. Furthermore, I consider that cross-examination is likely to focus on the construction of the model or the quality of the data. I consider that the difficulties and alleged complexities from an expert perspective have been somewhat overstated. In saying that, I do not lose sight of the matters identified by the Defendants' own expert and drawn to my attention during the course of the hearing, but I am not in a position to, nor would it be right for me to, determine at this hearing and in the context of what ultimately is a case management decision, whether the approach that Mr Noble adopts or that the Defendants’ expert advocates is one which will ultimately find favour with the court.

Sixthly, turning to the alleged savings in court time between a liability trial and a combined trial, I am far from convinced that such savings exist.

Seventhly, I am also not convinced that there would be a cost saving if there was a split liability trial versus a combined trial. The Defendants have not in fact quantified any such alleged saving, a point that Mr Kennelly made to me. I consider that the reality is obvious that with two trials, and likely appeals between the two, and separate disclosure exercises followed by separate expert evidence, the costs are likely to increase. It is not appropriate for me at this stage to attempt to assess the merits of the liability defences. Even if those liability defences are potential shortcuts, they could be treacherous shortcuts in terms of delay and expense once appeals and the separate disclosure exercises and separate trials are taken into account.

Accordingly, in relation to the question of the costs of a split trial versus cost of a combined trial, I consider that the likelihood is that a split trial will in fact lead to increased costs, as well as potentially cause delay, which is contrary to the overriding objective.

Trial Preparation and Management

It is submitted by the Defendants that a split trial would be more convenient in terms of trial preparation and management (in addition to suggesting, as already addressed, that a split trial would cost less and take less time than a combined trial). Daimler submits, however, that trial and case management would be significantly undermined by such a split, that there are unlikely to be savings in trial time, and that a split trial would delay the determination of the claim in follow-on damages. The Defendants’ riposte is to submit that a split trial would be more manageable than a trial of liability and quantum together: it is said that there are a number of complex issues of liability in addition to the various permutations on quantum. Daimler in turn submits, however, that a split trial would not be any more manageable than the whole trial due to the risk of satellite litigation and the need to balance two sets of disclosure with possible appeals and two separate trials.

As I have already foreshadowed. I am of the clear view that considerations of trial preparation and trial management weigh strongly in favour of a combined trial. This is for several reasons.

Firstly, in my view a split trial in these circumstances is not inherently more manageable than a combined trial, and any alleged difficulties of a combined trial do not weigh heavily in the overall balance.

Secondly, a split trial also impacts on judicial resources especially once possible appeals are taken into account. In this regard CPR Rule 1.1(2)(e) is to be taken into account as part of the overriding objective, namely the need to allot an appropriate share of court resources to a particular matter. Each of the trials which are contemplated would be a significant trial. Each would take part some time apart. There must be likely to be appeals in the meantime, as I will address in the next section. It might not be possible for the same judge to try both liability and quantum, particularly if there was a significant gap as a result of appeals and the need for disclosure not given at the liability stage. Judges might have been elevated or have retired. It would be an additional burden on court resources for there to be two trials with potentially more than one set of appeals and the potential of a second trial with a different judge and additional reading and preparation time. There is also the fact that splitting the trial and allocating two trials, one for liability, one for quantum, would also tie up limited available judicial resources in the Commercial Court over an extended period of time.

Thirdly, I attach significant weight to the fact that a large proportion is follow-on damages, which is likely to be significantly delayed by the splitting of the trial:

A split trial would not take place long before a full trial on liability and quantum. I also consider it unattractive for liability issues to be scheduled to be determined at a time, and in advance of, when it is anticipated a ruling from the CJEU will be available. That is envisaged to be around May 2021 based on the average time from a reference to a decision. It is in my view desirable that the ruling is available to the parties in advance of the trial. In this regard, Daimler proposes a trial on liability and quantum after the CJEU ruling. Though the trial date envisaged of June 2021 may not be achieved, or indeed may not be the trial date arrived at, at the CMC this afternoon, having heard further submissions from all the parties, it is in my view at least a more realistic start date, even if it requires adjustment when dealing with the case management issues on the CMC.

Fourthly, I bear in mind that (for reasons identified above), it is not clear that there would in fact be significant time or cost savings from having one trial as to liability and a further trial for quantum, as opposed to a combined trial.

Overall, I consider that a properly case managed trial of liability and quantum is preferable to a trial of liability alone.

Potential Prejudice to Daimler

This is a point which I have already considered under other headings, but I consider that it is, in its own right, a factor to be given particular weight. I consider that a split trial resulting in delay would cause prejudice to Daimler in the delay caused in obtaining a judgment on followon quantum damages. For the reasons I have already identified, it is likely that splitting the trial will delay the determination of the quantum of the whole claim (that is, follow-on damages and contested damages) by a significant margin. In circumstances where Daimler has a substantial follow-on claim in respect of the liability of several of the Defendants, as has already been established, it would in my view be highly prejudicial to Daimler that they be prevented from obtaining damages in relation to this admitted infringement of competition law by a split trial in order to make some alleged savings in relation to disclosure and expert evidence for the contested claims. As I say, such savings may or may not in fact transpire. It is notable that in the Leaflet Company case, there were no such follow-on claims: at [1] it was stated:

The Defendants make the point that prejudice to Daimler can be, to some extent, compensated in interest or that there could potentially be an interim payment in respect of a minimum perceived liability amount. However, the sums claimed are large, in excess of US$350 million, and the delay would be for a significant period of time (up to three years due to the high probability of appeals). Furthermore, I consider it would be difficult to calculate a "minimum liability" to make an interim payment without hearing evidence on quantum.

The Defendants also submit that a trial on liability taking place in advance of a trial on quantum would encourage the parties to settle, by defining the scope of the relevant commerce and therefore defining more clearly the total value of the claim. Daimler argue that such a split would not lead the parties towards settlement, and that probable delays before all issues were determined would remove any immediate incentive on the Defendants to settle.

As I have already foreshadowed, I consider that settlement is more likely to be hindered than helped by a split trial. In my view, the possibility of settlement is maximised if all the issues are prepared and tried together. As I said in my previous judgment at [136(5)]: “(5) In terms of the overall resolution of the dispute, and the possibility of settlement, such aims are maximised if all the issues are prepared and tried together and there are not outstanding issues still to be determined as experience shows that unresolved outstanding issues can be a hindrance to the overall resolution of the dispute and any settlement thereof”

I consider it is improbable that settlement will be possible until the true quantum of the claim or the various permutations on quantum is apparent. The sums at stake in this case are very large. It is true that most competition claims settle, but the prospects of this competition claim settling will be maximised at a time when all parties are aware of the likely quantum of any damages That is particularly so in the context of the fact that a large part of this claim is follow-on damages and on the timetable that would result from a split trial, it would be many years from now before that quantum would be known, which is no incentive to the Defendants to settle the overall proceedings in the meantime.

CSAV and NYKE.

CSAV and NYKE both make arguments that there are factors which are specific to them which they submit militate in favour of a split trial, whilst also supporting the arguments advanced on behalf of the WWL Defendants:

I do not consider that any of the points raised by NYKE or CSAV amount to a sufficient justification for a split trial:-

In the alternative, it is submitted that if the Court were to find the economic expert evidence to be relevant to the liability investigation, or that such matters needed to be explored at the liability stage, the Court could split off into a separate trial those questions which relate to liability and involve the expert evidence.

I consider that to be an unattractive submission. Firstly, it is in reality an application for partial preliminary issues which would divide the trial not only into liability and quantum, but some issues on liability followed by a trial on some issues of liability and quantum. It would carry with it all the vices that a split trial would carry. Indeed, given that there could be difficulties in demarcation as to what was being dealt with at the first trial in relation to liability and the subsequent trial, it could raise additional problems of its own.

Secondly, and in any event, I am satisfied that such an alternative application to split out the issues further is only likely to increase cost and expense, and be of little assistance to the overall resolution of the dispute. It would also not assist the Court of Appeal in the event that an appeal was made, because not all liability issues would be before the Court of Appeal. Further, I note that there is some overlap between the factual issues that must be determined for the purposes of substantive liability, and the preliminary points which the WWL Defendants propose to hive off into the First Trial. In particular, Mr. Kennelly for Daimler drew my attention to the fact that the question of whether German law applies raises some factual issues: under sections 11 and 12 of the Private International law (Miscellaneous Provisions) Act, the question determining governing law is the country in which the most significant element of the tort occurred, or whether it is substantially more appropriate for another law to apply. I did not hear submissions on whether this Act is the appropriate legislation for determining governing law in this case: however, even if the Rome II Regulation applied the law applicable will be the law of the country in which the damage occurred, or the law of a different country if the tort or delict is manifestly more closely connected to it (Articles 4(1) and (3), RIIR).

Thirdly, it would also not assist settlement because, again, not all liability issues would have been determined at the first trial.

Conclusion

Accordingly, and for the reasons that I have given, I consider that the application to split the trial is inappropriate, and that the matter should proceed to a trial on liability and quantum. Accordingly, I dismiss the applications for a split trial. I will in the second part of this hearing, to take place this afternoon, consider the case management directions that can be given at this stage in relation to the furtherance of this action.