May 22, 2004 – London – LAWFUEL -The Court of Appeal today gave a unanimous judgment allowing the appeal of Staines publican Bernie Crehan in his epic ‘ David and Goliath ‘ battle against Inntrepreneur Pub Company (CPC) and awarded him substantial damages for loss
suffered from a breach of the EU competition rules.
This is the first time the English Courts have awarded damages for breach of the
competition rules. Several hundred other tenants of Inntrepreneur have claims
which have been awaiting the outcome of this case.
Leading City law firm Charles Russell represented publican Mr Crehan throughout in
these proceedings, which arose from a claim that ‘beer ties’ imposed by
his landlord Inntrepreneur and former brewers Courage were unlawful. The case has
now established two ground-breaking rules of law: (1) that an’ innocent’
party has the right to bring such a claim, even though being a party to the
unlawful agreement; (2) that damages can be awarded for breach of the competition
rules. The Court has also given important guidance on causation and on the
calculation of damages in competition law claims.
The Court of Appeal has held that Mr Justice Park had been wrong to decide that
Inntrepreneur>’s network of beer ties did not breach European competition laws.
In particular, the judge had failed to give due deference to the known views of
the EC Commission on the matter, as he was obliged to do under his duty of sincere
co-operation and the principle of legal certainty.
The Court agreed with the judge that if the beer ties were in breach of the rules,
they did not benefit from an exemption under the Block Exemption Regulation. The
Court also agreed with the judge that Mr Crehan did not share responsibility with
Inntrepreneur for the infringement of the competition rules and so was able to
bring a claim.
The Court considered that under the English law on breach of statutory duty, it
would have been necessary for Mr Crehan to show not only that the beer tie was
unlawful, but also that the loss he suffered was of a type that the competition
rules were intended to prevent (which he had not done). However, the Court was
satisfied that under EU law he could succeed under the principle of”
effectiveness” ie that the rule of English law would render practically
impossible the exercise of Mr Crehan’s right to damages under EU law.
The Court considered that the judge was wrong to assess damages as at the date of
judgment rather than at the date of loss, as is the usual rule, and assessed
damages as at the date in 1993 when Mr Crehan gave up possession of his two pubs,
The Cock Inn and The Phoenix.
Several hundred publicans have cases awaiting the outcome of Bernie Crehan> ‘> s
test case. They are claiming damages for loss caused to them by beer ties which
meant that they were hit by a double > ‘> whammy> ‘> of Inntrepreneur seeking to
maximise rent and Courage seeking to maximise beer prices. The European Court of
Justice ruled in September 2001, in Mr Crehan> ‘> s case, that the publicans had a
right to claim damages.
Angus Murray, head of the competition group at Charles Russell, said: > “> This is
an important judgment . Previous claims brought by beer tie tenants have all
failed, but the Court of Appeal has now acknowledged that in recent years the
legal position has changed. The decision opens the way for other beer tie
tenants, hundreds of whose claims were put in suspense pending the outcome of this
case, to reopen their cases; and it opens the way for other claimants who have
suffered loss through breaches of competition law to seek compensation> .> “>