Antitrust Litigation 2020 Comparisons

Last Updated September 18, 2020

Contributed By Clayton Utz

Law and Practice

Authors



Clayton Utz has been established for more than 180 years, and now has over 165 partners and over 1,600 employees across six offices in Australia. The firm continues to strengthen its reputation for innovative and incisive advice. The Clayton Utz competition group, based in the firm's Sydney office, provides a national service to clients and industry ranging from government to local Australian corporates, through listed ASX organisations to global organisations. The team contains five dedicated competition partners who work collaboratively with class action litigation colleagues in relation to antitrust follow-on actions as well as with regulatory and corporate colleagues in respect of regulatory matters and transactions. Recent clients include large Australian retailers, telecommunications providers and banks, mining and infrastructure companies, and global entities undertaking transactions in Australia.

Australia is a mature antitrust litigation jurisdiction.

In essence, there are three types of antitrust litigation in Australia:

  • enforcement proceedings brought by the Australian competition regulator, the Australian Competition and Consumer Commission (ACCC) or the Commonwealth Director of Public Prosecutions (CDPP);
  • private action between commercial parties; and
  • class action litigation brought by a lead applicant representing a "class" of private parties (also known as "group members") that have suffered loss or damage due to alleged anticompetitive conduct.

The latter type of action is unusual in Australia. The more usual form of antitrust litigation is enforcement action brought by the regulator.

Active Antitrust Litigation Cases

There are currently a number of active antitrust litigation cases before Australian courts. These include:

  • criminal cartel prosecutions brought by the CDPP against:
    1. a number of banks in relation to an institutional share placement;
    2. a number of global shipping companies in relation to the transportation of vehicles to Australia;
    3. a money transfer business and individuals in relation to alleged fixing of exchange rates and transaction fees; and
    4. a supplier of assistive technology products used in rehabilitation and aged care;
  • civil cartel proceedings brought by the ACCC against a steel producer for alleged price fixing conduct;
  • civil actions brought by the ACCC against a port owner and a private hospital operator for misuse of market power, and another port owner for entry into an agreement with an anti-competitive purpose or effect;
  • class action in relation to the global forex cartel; and
  • private action against a digital platform operator for (amongst other things) alleged anti-competitive conduct.

In addition, the ACCC has indicated that it expects to bring two more cartel cases before the courts by the end of 2020, and that it plans to institute at least four new cases for breach of the Australian Competition and Consumer Act 2010(Cth) (CCA).

Developments in Antitrust Litigation

In relation to regulator-instituted antitrust proceedings, the primary development is that ACCC is pushing hard for higher penalties for contraventions of the CCA. For some time, the ACCC has sought to increase penalties both for their deterrent effect, and to be in greater alignment with the EU and USA where significant penalties are the norm. The ACCC has had some success with this strategy in recent years.

A further development has been in the context of investigations leading to proceedings, which is that cartel investigations are now initiated with view to criminal cartel proceedings being commenced. This change has occurred since the introduction of criminal cartel offences in 2009, but has been particularly noticeable in the last several years, resulting in the ACCC more commonly referring matters to the CDPP than commencing an action for a civil penalty in its own right.

The outcome of the ACCC's antitrust litigation has also assisted the ACCC in arguing for, and achieving significant legislative and policy changes. Some of the ACCC's losses in the past decade have assisted in driving legislative reforms to the CCA. For example, the introduction of a new prohibition on anti-competitive concerted practices was partly fuelled by the ACCC's failure to win cases alleging cartel conduct given the technical requirements for demonstrating that such conduct had occurred in Australia.

The ACCC has significantly increased its investigative capabilities and resources in recent years, with dedicated investigators assigned to its criminal cartel branch, and sector specific teams such as digital platforms, financial services and construction.

The ACCC's investigation and enforcement activities have also been bolstered by the many wide ranging market inquiries that it has been directed to conduct in recent years, for example, in relation to digital platforms, financial institutions and foreign currency conversion, and electricity and gas markets. The ACCC has investigated and taken enforcement action (including commencing proceedings) for anti-competitive conduct uncovered during these inquiries. Most notably, the ACCC has commenced a number of actions against a digital platform as a direct result of its Digital Platforms Inquiry.

The ACCC is also increasingly investigating and taking action in industries and sectors that it has not traditionally focused on. The examples mentioned above (involving digital platforms and the financial services sector) are two such areas.

Due to the impacts of COVID-19, the courts have largely moved to reduce in-person hearings in favour of conducting remote hearings. While some proceedings have been delayed as the courts adjust to the impacts of COVID-19, the move to remote hearings has not otherwise materially impacted Australian antitrust litigation.

The legal basis for a claim for damages is based on breach of the CCA, being an Australian Commonwealth law, not a State law. The ACCC, may bring civil proceedings for breaches of the CCA. Criminal prosecutions for certain breaches of the cartel provisions are brought by the CDPP.

A person who has suffered loss or damage as a result of a contravention of the CCA may also bring stand-alone civil proceedings or a follow-on action against any person involved in the breach seeking damages under Section 82 of the CCA, or compensation orders under Section 87(1) of the CCA. A claim for compensation orders under Section 87(1) can also be made by a person who is likely to suffer loss or damage as a result of a breach. Follow on actions may be brought by a single applicant or by a "class" of people who claim to have suffered loss or damage.

In the case of follow-on actions, applicants can rely on Section 83 of the CCA which provides that findings of fact, including admissions, made in prior proceedings (typically public enforcement actions by the ACCC) is prima facie evidence of that fact in future proceedings (eg, follow-on actions for damages or compensation orders).

The ACCC in civil cases, or the CDPP in criminal cartel cases, may also make an application for compensation orders under Section 87(1) of the CCA on behalf of such persons.

There are no specialist competition courts in Australia for antitrust litigation.

Subject to a small number of exceptions, the Federal Court of Australia (FCA), a Commonwealth Court of various divisions, has exclusive jurisdiction to hear civil and criminal matters in relation to the competition law provisions of the CCA. There are a number of Judges of the FCA who are part of the Economic Regulation, Competition and Access sub-area and specialise in competition law matters. In the usual course, a matter commenced in the FCA that concerns a competition law issue will be allocated to a Judge that has specialist expertise.

The Australian Competition Tribunal is a specialist competition tribunal that has jurisdiction to review certain decisions made by the ACCC, however, it does not have jurisdiction to determine litigious proceedings under the CCA.

The decisions of the ACCC are not binding on any Australian court.

The ACCC may, with leave of the court and subject to any conditions imposed by the court, intervene in any proceedings instituted under the CCA, including private proceedings. The ACCC has published guidance on intervention in private proceedings, which state that the ACCC will consider intervening if the case involves significant public interest, a construction of the Act in untested areas, or to clarify its operation and/or international conduct such as anti-competitive conduct and consumer exploitation on an international scale.

The burden of proof is generally on the party seeking to establish a contravention of competition laws (the ACCC, the CDPP or a private party).

The burden may shift to a defendant in some circumstances, such as where they seek to rely on a particular statutory defence (eg, the joint venture defence to cartel conduct under Section 45AO of the CCA).

For civil proceedings brought by the ACCC or private parties, the standard of proof is the "balance of probabilities".  For criminal proceedings brought by the CDPP, the standard of proof is "beyond reasonable doubt".

There is no statutory pass-on defence recognised under Australian competition laws. 

Claims may be brought by direct and indirect purchasers provided that they are able to establish on the balance of probabilities that they have suffered, or are likely to suffer, loss or damage as a consequence of conduct contravening the CCA.

The duration of a competition law claim will depend on the nature and complexity of the case. These may include: the number of issues in contention, the extent and number of any interlocutory issues, the number of witnesses and experts, the extent of any discovery, whether the court orders any stay of the proceedings, and whether the case is subject to any appeals process.

For proceedings brought by ACCC, the typical duration of proceedings (assuming that the case runs to trial and does not settle before then) would be at least two to three years. Matters that settle before trial typically take about two years to conclude. That said, some cases run for considerably longer, for example, the civil proceedings initiated by the ACCC in relation to the alleged high voltage cable cartel took nine years to conclude. Such cases should be considered as outliers.

Antitrust class actions have never been run to trial in Australia as they have settled pre-trial making it hard to determine a typical timeframe.

Suspending Proceedings

The concept of suspension pending an investigation is not relevant for Australia. The ACCC would only initiate proceedings once it had concluded its investigations, and private parties typically would not initiate follow-on proceedings until after any proceedings initiated by the ACCC have concluded (so that they can rely on findings of fact made in those primary proceedings).

While parties can apply for an order to stay proceedings this is quite unusual and will generally only be granted by the court to allow proceedings to be managed in a different forum or to await the outcome of a proceeding in a different forum.

In Australia, there are statutory class action regimes in the FCA and the Supreme Courts of New South Wales, Victoria, Queensland and Tasmania, which are State courts. The courts in the four other Australian States and Territories have limited provisions for group actions. Class actions have been brought in many types of claims, including in relation to cartel conduct.

Class Actions Regime

The class actions regime has been in force since 4 March 1992, with the relevant provisions of the regime outlined in Part IVA of the Federal Court of Australia Act 1976 (Cth) (Part IVA). Generally, a class action is commenced by a lead applicant or applicants on behalf of group members. However, there are federal legislative provisions that allow the ACCC to institute representative proceedings on behalf of a group.

For example, the ACCC may institute proceedings for breaches of Federal anti-competitive statutory provisions on behalf of persons who have suffered, or are likely to suffer, loss or damage by reason of the contravening conduct. The ACCC can only pursue a representative proceeding on behalf of persons who have been identified and who have consented in writing to the action. A proceeding could involve claims of direct and indirect purchasers but this will depend on the scope of the group member definition.

Opt-Out

Part IVA provides for an "opt-out" system for class actions, which means that each person who is a member of the class (as defined in the originating process) is part of the proceeding unless they notify the court that they wish to opt-out. Following commencement of a proceeding, the court will fix a date by which group members are required to opt-out. If a group member does not opt-out, they will be bound by any judgment of the court.

Class actions can be commenced by a single or multiple lead applicants (on behalf of group members) provided the following three requirements are met:

  • at least seven persons must have claims against the same person;
  • the claims of all of these persons are in respect of, or arise out of, the same, similar or related circumstances; and
  • the claims of all these persons must give rise to at least one substantial common issue of law or fact.

There is no certification requirement and no other process by which a class action need be approved by the court before it can proceed. In relation to the size of the class, there is no imposed limit to the number of group members, rather, the group definition determines the scope of the class. Provided an individual meets the group member definition and does not opt out, they will be a member of the class.

A class action cannot be settled without the approval of the court. Once an in-principle settlement is reached, group members are notified of the proposed settlement through a court-ordered notification process.

As part of the approval process, the court must assess whether the proposed settlement is a fair and reasonable outcome of the proceeding for the group members as a whole. The court is empowered to reject a proposed settlement if it is not satisfied that the proposed settlement meets that requirement. Evidence (including confidential exhibits) is put before the court as part of the approval process. Group members are entitled to object to the proposed settlement, however if the court ultimately approves the settlement, all group members will be bound by it.

If a court is not satisfied that the proposed settlement is fair and reasonable, it can withhold approval and the representative action will proceed.

Strike Out of an Action

Australian courts have the power to strike out the whole or any part of a pleading if:

  • the pleading discloses no reasonable cause of action or defence;
  • it has a tendency to cause prejudice, embarrassment or delay in the proceedings; or
  • is otherwise an abuse of the process of the court.

A pleading may tend to prejudice, embarrass or delay the fair trial of the proceedings if it contains allegations which are vague or imprecise such that the other party cannot plead to such allegations specifically, or if it contains allegations that are irrelevant, unnecessary or scandalous.

Summary Judgment or Dismissal

Australian courts also have the power to enter summary judgment for the plaintiff and summary dismissal for the defendant. An application may be made in relation to the proceedings as a whole, or particular claims in the proceeding. For a summary judgment to be awarded, the plaintiff must establish that there is:

  • evidence on the facts which justifies a claim for summary judgment;
  • a belief that the defendant has no defence to the claim; or
  • there is no issue to be tried ie, the defendant is relying on a defence that is so flawed it cannot possibly succeed.

For a summary dismissal to be issued the defendant must demonstrate that:

  • the proceedings are frivolous or vexatious;
  • the plaintiff has not disclosed a reasonable cause of action; or
  • the plaintiff's proceedings are an abuse of process.

Orders for strike out, summary judgments and summary dismissal are very seldom handed down in antitrust litigation cases. On very few occasions, pleadings have been struck out for being poorly articulated, however in practice, courts tend to allow plaintiffs to withdraw and resubmit a revised claim that is property articulated.

Territorial Jurisdiction

The jurisdiction of the CCA applies to conduct in Australia by Australian corporations, foreign corporations, and individuals.

Extraterritorial Jurisdiction

In addition to this, certain provisions of the CCA have extraterritorial operation, including restrictive trade practices (which include the cartel provisions, anticompetitive contracts, arrangements or understandings, and concerted practices) and Australian Consumer Law (ACL) (Schedule 2 of the CCA, other than the country of origin representations provisions). These parts of the CCA extend to conduct engaged in outside Australia by Australian citizens, Australian residents or corporations that are incorporated in Australia or carrying on business within Australia.

The CCA further extends the prohibitions on exclusive dealing and resale price maintenance to any person engaging in conduct outside Australia in relation to them supplying goods or services to persons within Australia.

The CCA also extends the prohibitions on misuse of market power to conduct in respect of markets in Australia and New Zealand and conduct by New Zealand corporations, residents and corporations carrying on business in New Zealand. These provisions are included because of the close economic ties between Australia and New Zealand.

Damages Under the CCA

A damages claim may be commenced within six years of the day on which the cause of action that relates to the conduct accrued.

Civil Pecuniary Penalties

Proceedings in which the ACCC is seeking pecuniary penalties must be brought within six years of the date of contravention (Section 77 of the CCA).

Criminal Penalties

For criminal prosecution of cartel conduct, there is no limitation period but proceedings may only be brought for conduct occurring after 24 July 2009, which is the date on which the criminal cartel offences included in the CCA came into effect.

In Australia, the requirement to identify and enumerate documents relevant to the proceedings is known as "discovery", whereas "inspection" refers to the requirement to produce copies of those documents to the other parties.

A document is generally considered to be any record of information, regardless of the method of storage. Therefore, a document may be digital or analogue, visual or auditory, or written.

Discovery Generally

There is some variation in the threshold approach to discovery and applicable procedure depending on the jurisdiction within Australia.

The traditional approach, still adopted by some State courts, is that the parties may be required to give "general discovery"; that is, the parties must discover and list all documents within their possession, custody or power which relate to any matter in question in the proceedings.

The test for relevance is set out in Compagnie Financiere et Commerciale du Pacifique v Peruvian Guano Company (1882) 52 LJQB 181: A document is discoverable if it is reasonable to suppose that it contains information which may either directly or indirectly enable the party seeking discovery to either advance their case or damage their adversary’s case (which includes documents which may fairly lead to a train of inquiry which may have either of these two consequences).

The obligation to give discovery may be automatic under the rules of the relevant court, or the rules may provide that the obligation to discover is triggered by a notice given by one party to the other, or that a party must apply to the court for an order for discovery.

Where a party is obliged by the rules or an order to give discovery, that obligation is a continuing one and does not come to an end when the party has served a list of documents. If, after the party has served its list, it identifies more documents that meet the relevant criteria (whether that be general or standard discovery or discovery by categories), the party is required to discover those documents by service of a further or supplementary list of documents.

Searching for Documents to Discover

Parties must make a diligent search for relevant documents that are within their possession, custody or power, but it is generally accepted that the search is not required to be exhaustive or oppressive.

"Possession" means the right to physical possession, and also the right to possession of the document and so encompasses documents held by agents of the party; "custody" means actual physical possession regardless of the right to possession (an agent has custody of the document of their principal); and"power" (or sometimes "control") means an enforceable right to inspect or obtain possession of the document from the person who ordinarily has possession of it.

The various court rules differ as to the form in which discovery is to occur: in some jurisdictions an informal list is sufficient, whereas in others the list of discovered documents is to be verified on affidavit. The list should describe the documents being discovered so that they can be adequately identified.

Current Approach of Australian Courts to Discovery

Increasingly, however, the courts seek to minimise the burden of discovery on the parties by various means.

For instance, the FCA has amended the Federal Court Rules (FCR) to the effect that no party is required to give discovery except when an order has been made to that effect. Further, the FCR require that a party may not apply for an order for discovery unless that party can show that such an order will facilitate the just resolution of the proceedings as quickly, inexpensively and efficiently as possible.

The court expects that the parties will consider and confer with one another in relation to specific categories of documents that are sought. If agreement cannot be reached, parties may apply to the court for a ruling on relevant categories.

Electronic Discovery

If the parties intend to give electronic discovery, it is expected that they confer and reach agreement on a suitable protocol setting out the format of digital files that are to be provided including metadata.

Availability of Pre-action Discovery

Pre-action discovery is generally available on application subject always to the court's discretion. A party against whom pre-action disclosure is sought is generally entitled to their costs of the application and of the search and production required to be undertaken to respond to any order made.

However, because the question of relevance is tested against the pleaded cases of the parties, it is more usual for discovery and inspection to take place after the close of pleadings. While it is possible to apply for early discovery, this is reserved for exceptional cases where a particular need is shown. It is also likely that an application for early discovery will only be successful if the application is confined to a well-defined category of documents.

In all courts in Australia, a document that is the subject of a privilege from production is discoverable and must be listed. However, a privileged document may be withheld from inspection.

In practical terms, this requires that the list of discovered documents contains two parts:

  • those documents in respect of which the party does not object to inspection by its opponents; and
  • those documents that the party claims are privileged from production.

Forms of Privilege

There are a number of relevant privileges:

  • Legal professional privilege applies to documents recording confidential communications between solicitor and client that were made for the dominant purpose:
    1. of giving or receiving of legal advice ("advice privilege"); or
    2. for use in or for carrying on actual or contemplated legal proceedings ("litigation privilege"). Whether litigation is anticipated or contemplated is a question of fact determined on objective criteria not subjective belief;
  • Common interest privilege, where two or more parties have a common interest in the advice or litigation;
  • Public interest privilege which applies where a document contains information that it would be injurious to the public interest to disclose  - it would not be typical for a party other than the ACCC or CDPP to attempt to rely on this form of privilege; and
  • "Without prejudice" communications, which arise where the parties have engaged in communications in an effort to settle a dispute between them  - this is said to give rise to a joint privilege so that neither one can produce or refer to the communications without the consent of the other.

Waiver of Privilege

Legal professional privilege may be waived if a document is produced to an opponent (unless that occurs accidentally) or the substance of the advice is revealed. Common interest privilege or without prejudice privilege cannot generally be waived except with the consent of all parties sharing in the privilege.

Where the client is a corporation, it is necessary to determine who within the corporation is authorised to obtain legal advice on the corporation as a very wide dissemination of the advice within the organisation may amount to a waiver of the privilege.

Legal professional privilege (and common interest privilege) does not apply to communications to facilitate crime or fraud, even if a party's lawyer is ignorant of that purpose.

Claiming Privilege in the Context of Discovery

A party that claims privilege from production in respect of a document must give a sufficient description of the document and the grounds of the privilege claimed in order that the other party can reach a view whether the claim of privilege is properly made or if not, to challenge it. If the other party disputes that a sufficient description has been given or that the privilege has not been made out, it may be necessary to put on affidavit evidence to further substantiate the claim.

Immunity Applications

Where the ACCC grants immunity or leniency to a party under its Immunity and Co-operation Policy for Cartel Conduct (Immunity Policy), the ACCC will use its best endeavours to protect any confidential information provided by the party, including their identity, while the investigation is ongoing.

The ACCC is obliged by s 155AAA of the CCA to not disclose any protected information except in certain circumstances. "Protected information" includes information that was given in confidence to the ACCC or obtained pursuant to its powers to compel production of documents and information. The ACCC may, however, disclose protected information where disclosure is required by law to do so, where it is required in the exercise of the ACCC's functions, and where it would assist or enable another agency, including a foreign government body.

The party granted immunity and its legal representatives is required to keep confidential the fact of their application, as well as any information that they have provided to the ACCC in support of their application while the ACCC's investigation is ongoing.

However, once proceedings are commenced, it would be usual for the fact of the application to become public knowledge and for information provided in the course of the investigation to form part of the evidence brought in support of the proceedings.

Similarly, the provision of information to the ACCC does not make the party immune, in follow on proceedings, from production to the applicant of information provided to the ACCC. Nor is the ACCC immune from the production of that information under subpoena if a subpoena is issued by the court.

Following an amendment to the Immunity Policy in late 2019, the ACCC now seeks a party's agreement to written terms concerning that party's co-operation in the course of any immunity application. It seems likely that any such an agreement could be the target of discovery where it is held by the immunity applicant, or subpoena where it is held by the ACCC.

Settlement Agreements on Penalty

The ACCC does not have the power to enter into a settlement agreement for breach of the CCA with a party in the enforcement context where a penalty is sought. That is because the ACCC is unable to issue a penalty in its own right and must initiate proceedings in court for a civil pecuniary penalty, or alternatively, for criminal breaches of the CCA, the CDPP must seek a criminal penalty from the court.

In civil matters, the court will consider whether any penalty proposed jointly by the ACCC and the party is within the applicable range, and if so, issue a penalty in the agreed amount. If the court does not believe any agreed penalty is appropriate it will substitute its own judgment when issuing the penalty.

In criminal proceedings, the CDPP may not make a recommendation to the court on penalty, although a defendant party may do so. The CDPP may make submissions to the effect that the court will not fall into appealable error if a criminal penalty is awarded in the range proposed by the defendant. The prohibition on the CDPP is imposed because criminal penalties are matters entirely for the court.

In either of the above scenarios, the proceedings are public and are not the subject of a settlement agreement between the regulator and the party.

Settlement Agreements by Way of Enforceable Undertaking

Where the ACCC does not seek a penalty but seeks to have the party undertake to change its conduct or practices, it may request the party to enter into a court enforceable undertaking. Such undertakings are publicly available and are posted to the ACCC's website. They set out both the particular practice the party undertakes to cease, as well as any remedial steps to be taken.

Evidence in Chief

A party has discretion in which witnesses it chooses to call but should call all witnesses necessary to establish the facts it pleads. The unexplained failure of a party to give evidence, call witnesses or tender documents/evidence may, in appropriate circumstances, lead to an inference that the uncalled evidence would not have assisted the party's case (but not that it would have damaged their case).

The form of evidence in chief is ultimately at the discretion of the court and will usually depend upon the nature of the evidence.

For most antitrust proceedings, affidavits are generally used in place of a witness giving oral evidence in chief in court.

Trials are not usually run on the basis of oral evidence, other than cross-examination as discussed further below, because it is often more time consuming. The use of affidavits accords with case management principles encouraging more time and cost-effective litigation. The form of an affidavit is highly prescribed.

In some courts, there has been a more recent trend towards oral testimony particularly where witness testimony is likely to be particularly contentious and there are issues of credibility. Where oral testimony is to be given, there will be a requirement for an outline of evidence to be served on the other side in advance of trial.

Providing an affidavit does not make the information contained part of the evidence, the affidavit must be read to the court before it forms part of the evidence (subject to any objections for admissibility). Evidence in chief, whether oral or by affidavit must be admissible, that is it must be relevant and must not fall within an exclusion. The common exclusions for lay witnesses are hearsay, relevance and opinion. For interlocutory matters the hearsay rule may be relaxed in some jurisdictions.

Cross-Examination

Generally, any witness who is called to give evidence by one party may be cross-examined by the party against whom the witness has testified.

Cross-examination is always oral and usually in person, although given the current COVID-19 pandemic, cross-examination is currently being undertaken virtually. Prior to the COVID-19 pandemic, a virtual examination was the exception rather than the rule, and usually only occurred when a witness could not reasonably travel to the relevant court.

A witness may be cross-examined both on facts and credibility. As with evidence in chief, a witness in cross-examination must be confined to matters of fact which are admissible.

A party is not required to cross-examine witnesses. Where witness testimony is required to adduce documents that are not controversial it is common for there to be no cross-examination. Where a party's case is unlikely to be assisted by cross-examination or an opponent's case may be improved by a witness giving oral testimony, a party may choose not to cross-examine.

A key factor in deciding whether or not to cross-examine a witness is whether a party wishes to lead evidence which is contrary to the witness' evidence or suggest that the witness' testimony is not accurate. A party may not lead evidence contrary to a witness' testimony without first putting the contrary evidence to the witness.

Compulsion

Where a witness is unwilling to testify, a party may apply for a subpoena to compel the witness to give evidence. Subpoenas can compel a witness to provide oral testimony or provide documents or both. For strategic reasons, it is more common for a party to apply for subpoenas for the production of documents rather than the giving of evidence.

A party cannot compel a witness to speak with lawyers or otherwise engage with the litigation process outside of the bounds of a subpoena. When a subpoena is issued by the court it must then be served on the recipient. Subpoena recipients should be aware that as subpoenas are court orders, failure to comply with them is punishable as contempt of court. Failure to comply with a subpoena can result in a warrant being issued for the arrest of the recipient.

A subpoena requires payment for reasonable expenses. As a subpoena compels a recipient to the proceeding to do something, whether give evidence or product documents, the recipient is entitled to payment of its reasonable costs of compliance.

Where a witness is compelled it may also be the case that an application is made to the court for the party calling the witness to be permitted to cross-examine the witness as a hostile witness.

General Principles of Expert Evidence

Expert evidence is a common part of litigation particularly in antitrust matters which often involve complex economic modelling as the fundamental principle is that: "the purpose of expert evidence is to provide the court with information which is outside the experience and knowledge of a judge and jury". Expert evidence is permitted as an exception to the general rule against opinion evidence. The facts upon which the expert bases their opinion must be separately established. While a common occurrence, parties do require the leave of the court to adduce expert evidence.

Parties may choose to engage "consulting" or "armchair" experts as well as testifying experts. Some jurisdictions require parties to identify such experts, so care should be exercised in selecting and communicating with experts.

The FCA requires a party give an expert it intends to retain a copy of the relevant court practice note dealing with guidelines for expert witnesses in proceedings in the court.

Form of Expert Evidence

The evidence in chief of an expert witness is given in the form of a report which is usually filed and served well in advance of trial. Generally, expert evidence is only called at trial after the completion of witnesses of fact. The expert will then be called upon to swear an affidavit as to whether they holds the opinion expressed in the report or if the expert now holds a different opinion, the nature of that opinion and the factual basis for that opinion.

The form of the expert report can vary considerably but must adhere to the rules of the relevant jurisdiction. There are several common elements required across all jurisdictions:

  • the expert's qualifications on the subject of the report;
  • the facts, and assumptions of fact, on which the opinions in the report are based and the question(s) answered by the report (a letter of instruction may be annexed);
  • the expert's reasons for each opinion expressed - if the expert considers that their opinion is not a concluded opinion because of insufficient research or data, this must be stated;
  • any literature or materials utilised in support of the opinions;
  • any examinations, tests or investigations on which the expert has relied; and
  • the qualifications of persons who conducted such examinations/tests/investigations.

Other elements may also be prescribed by each jurisdiction, including costs arrangements.

Joint Reports, Conferral and Other Methods of Hearing Expert Evidence

It is common for the court to order some form of conferral between experts of the same or similar expertise following the filing of expert reports. The purpose of conferral is to identify where the experts might find agreement and areas in which they differ. These areas of agreement and difference and the reasons for the difference are then the subject of a joint report by the experts.

The form of the conferral is subject to the court's discretion. The court may direct conferral occur with or without the parties' legal representatives and/ or in the presence of a registrar of the court or other independent facilitator.

It is expected that the conferral would take place in person or by telephone or video conference where in person meetings are not practical and a conferral may occur over several meetings.

An expert directed to confer or prepare a joint report must:

  • exercise their independent, professional judgement;
  • endeavour to reach agreement with the other expert; and
  • not act on any instruction or request to withhold or avoid agreement with the other expert.

The report should be composed by the experts and not the representatives of the parties. The joint report should be signed by all participating experts and then provided to the court.

Concurrent Evidence and Cross-Examination of Experts

Experts may be called for cross-examination in any order the court sees fit. Traditionally, experts would be called to give evidence one after the other in the usual order of evidence in chief, cross-examination and re-examination before the next expert is called.

However, each expert on the same subject matter or issue may be called for cross-examination and re-examination concurrently, known in Australia as a "hot tub", allowing parties to put the same question to each expert in turn and for the judge to ask questions. In some instances, subject to the court's orders, in the concurrent process experts are also able to ask questions and comment on the evidence given by other experts.

Generally, damages are calculated on a compensatory basis; that is, to compensate an applicant for loss suffered as a result of a respondent’s wrongdoing.

Whilst the courts are empowered to award exemplary, punitive or aggravated damages, in practice exemplary damages are extremely rare. There are also extensive statutory restrictions on their application.

With respect to class actions brought in the FCA, under s33ZB of the Federal Court of Australia Act 1976 (Cth) a judgment given in a representative proceeding must describe or otherwise identify the group members who will be affected by it.

The Australian Courts have not yet directly considered the "passing-on" defence and, as a result, it is presently unclear whether it would be available in an action concerning a breach of competition law.

Australian courts are empowered to order interest on awards of damages. This can include pre-judgment and/or post-judgment interest.

The rate of interest will vary from Court to Court and is prescribed by the legislation and rules of the relevant Court. For example, in New South Wales, Sections 100 and 101 the Civil Procedure Act 2005 (NSW) indicate the rate at which pre-judgment (Section 100) and post-judgment (Section 101) interest is to be calculated for proceedings commenced in the Local (civil claims), District and Supreme Courts.

Joint and Several Liability

Under Section 82 of the CCA a person who suffers loss or damage by conduct of another person that was done in contravention of the restrictive trade practices provisions of the CCA can commence proceedings against that other person, or against any person involved in the contravention, to recover the amount of the loss or damage.

Australian case law in Australia has not yet considered whether the liability of cartel participants under the CCA is several, or joint and several. However, it has been observed that the policy considerations which underlie the CCA and the similarity with conspiracy to commit the tort of deceit which gives rise to joint and several liability, mean liability under the price-fixing cartel provisions may be joint and several.

Limitations on Liability to Direct Purchasers

Australia does not have any analogous provision to that contained in Article 11 of the European Directive that an immunity recipient's liability, as well as its contribution owed to co-infringers under joint and several liability, is limited to the harm caused to its direct or indirect purchasers.

The CCA does not contain any provision which enables a contravener to bring a claim for contribution against another person and there is no broadly applicable contribution regime under any other federal statute. Similarly, the CCA does not provide for proportionate liability (in contrast to actions for damages under Section 236 of the ACL for which apportionment is available).

Claims for contribution in equity are unlikely to succeed, given a contravenor of the CCA is unlikely to be able to seek equitable relief with "clean hands".

However, rights of contribution in respect of liabilities under the CCA may be determined according to the statutory contribution regimes of the various Australian states. For example, Section 23B of the Wrongs Act 1958 (Vic) provides that a person liable in respect of any damage suffered by another person may recover contribution from any other person liable in respect of the same damage (whether jointly with the first-mentioned person or otherwise). This provision has been used to permit claims to be made between respondents in antitrust follow on class action proceedings.

General Power of the Court to Grant an Injunction

The FCA has the power to grant injunctions (including interlocutory injunctions) to restrain conduct that may be in breach of the restrictive trade practices provisions of the CCA.

Anyone may make applications to the court for an injunction, other than in relation to proposed mergers, although it would be more usual for the ACCC to seek to do so in antitrust enforcement proceedings than for a private party. The CCPP can also seek an injunction for alleged cartel offences.

Although the court may grant an injunction on the basis of consent by all relevant parties, the more usual application is for an:

  • urgent injunction (together with an undertaking that the party seeking the injunction will commence a proceeding within 14 days) without notice to the respondent (ie, ex parte); or
  • interlocutory relief at the time of commencing a proceeding (pleadings must be served to the respondent at least five days before the "return date", which is the date fixed by a registrar for the hearing of the application).

Any urgent injunction will ultimately need to be supported by a claim substantiated in pleadings. The Court will usually list hearings for applications for injunctions at the earliest appropriate time.

Circumstances in Which an Injunction will be Granted

The CCA confers relatively wide powers on the Court to grant an injunction. The Court will ultimately need to be satisfied on the civil standard of proof, being the balance of probabilities, that:

  • there is a serious issue to be tried; and
  • the balance of convenience favours the grant of an injunction.

The latter part of the test is sometimes articulated as whether the applicant would suffer more damage if the injunction were not granted than the defendant would if the injunction was granted, thus requiring preservation of the status quo.

This means that a court may restrain a person from engaging in relevant conduct (and similarly, order a person to engage in relevant conduct) whether or not:

  • it appears to the Court that the person being alleged of contravention intends to engage again, or to continue to engage, in the relevant conduct;
  • the person being alleged has previously engaged in such relevant conduct; and
  • there is immediate danger of substantial damage to any person if the alleged person engages in the relevant conduct.

Damages

In the usual course, an application for an injunction needs to be accompanied by an undertaking as to damages. This is an undertaking:

  • to submit to such order (if any) as the Court may consider to be just for the payment of compensation, to any person, affected by the operation of the injunction or any continuation of the order or undertaking; and
  • to pay the compensation referred to, to the person affected by the operation of the injunction.

In the context of injunction applications made by the ACCC for alleged breaches of the relevant CCA provisions, the Court will not require such an undertaking to be given(the same applies for applications made by the CDPP for alleged cartel offences).

Costs Orders

The Court will make cost orders after the parties are given the opportunity to be heard in relation to the injunction application. For interlocutory injunction applications, the Court orders are likely to be to the effect that costs be costs of the parties in the cause, to be determined as part of the subsequent substantive hearing.

Mediation is available as an alternate dispute resolution process.

As part of the court's framework for case management, a court will usually consider, and may order that the parties are to engage in mediation to settle the matter without the need to have the matter adjudicated after a full trial. Mediation can also be an order sought by the parties prior to the trial.

Further, the parties (and their lawyers) are expected to co-operate with each other and the court to achieve the court's overarching purpose of reducing costs and delays by:

  • contesting only the most relevant issues;
  • reducing the need for unnecessary factual investigation; and
  • requiring as few interlocutory applications as necessary for an efficient disposition of matters.

Litigation funding for class actions is permitted in Australia and is an arrangement under which a third party (the funder) contributes some or all of a party’s costs, or provides security or indemnities for costs. If the action is successful the funder then receives part of the settlement or judgment sum.

As third party funders are providing a financial product or service they are subject to statutory regulation and including by the Australian Securities and Investments Commission (ASIC) and under the ASIC Act 2001 (Cth), which contains various consumer protections. They are also regulated under the Corporations Act 2001 (Cth). To reduce the risk that a funder may have insufficient funds to pay adverse costs, a recent amendment to the Corporation Act which came into effect on 22 August 2020 requires funders to register class actions as managed investment schemes and to hold an Australian Financial Services Licence. These amendments have been criticised by class action litigators and ASIC, who is now required to oversee these changes.

Where an application is funded by a litigation funder in a class action, the fact of the funding and the identity of the funder must be disclosed.

Specialist class action law firms may also self-fund litigation. Where that is the case, the defendants in the class action are likely to seek security for costs to mitigate the risk of the firm holding insufficient funds to pay costs.

Costs at the Close of a Proceeding

Costs are awarded in antitrust litigation under the court rules and are granted in favour of the successful party. The usual form of costs is "party and party" costs, which means costs incurred in the conduct of the litigation that are fair and reasonable.

Costs are also awarded by reference to a court scale, which sets the rates for particular work undertaken by reference to the seniority of the person who performed the work. The application of a court scale means that a successful party cannot expect full recovery of costs expended.

The usual practice for costs in interlocutory proceedings heard during the life of the matter is for costs expended in those proceedings to be costs in the cause, although specific orders may also be made by the court (for example, where the judge takes the view that the specific interlocutory proceeding should not have been brought).

Security for Costs

In the FCA, where the majority of antitrust proceedings will be commenced, security for costs may be sought under the FCRs. The court must consider the following factors:

  • whether there is reason to believe that the applicant will be unable to pay the respondent’s costs if so ordered;
  • whether the applicant is ordinarily resident outside Australia;
  • whether the applicant is suing for someone else’s benefit;
  • whether the applicant is impecunious; and
  • any other relevant matter.

The authorities have provided guidance for the making of an application for security for costs to the following effect:

  • that such an application should be brought promptly;
  • that the strength and bona fides of the applicant’s case should be considered;
  • whether the applicant’s impecuniosity was caused by the respondent’s conduct, which is the subject of the claim;
  • whether the respondent’s application for security is oppressive, in the sense that it is being used merely to deny an impecunious applicant a right to litigate;
  • in the case of a company, whether any person is standing behind the company who is likely to benefit from the litigation, and who is willing to provide the necessary security - if so, whether that person has offered any personal undertaking to be liable for the costs, and if so, the form of any such undertaking; and
  • that security will only ordinarily be ordered against a party that is in substance the plaintiff, and an order ought not to be made against parties that are defending themselves and thus forced to litigate.

In practice an order that security be paid requires the payment of a sum into court, or into a solicitors' trust account, pending the outcome of the dispute. Applications for additional security for costs may also be made.

Judgments of a single judge of the FCA, whether interlocutory or final, may be appealed to the Full Court of the Federal Court (three or more Judges sitting together) on questions of law.

Judgments of State or Territory courts may be appealed, including to State or Territory Supreme Courts or Courts of Appeal, on questions of law. An appeal from a State or Territory Supreme Court to a Court of Appeal is possible, provided the relevant Court of Appeal grants permission to appeal.

Judgments of the FCA or a State or Territory Court of Appeal may be appealed to the High Court of Australia (HCA), provided the HCA grants special leave to appeal.

The HCA must have regard to the following criteria when deciding whether to grant special leave to appeal:

  • the matter involves a question of law of public importance; or
  • the matter involves a question of law requiring final resolution; and
  • the interests of the administration of justice require consideration of the matter by the High Court.

If special leave is refused, there is no further avenue of appeal available in Australia. If special leave is granted, any decision from the HCA on the matter is final.

As a matter of process and where there is material public interest or the potential for a miscarriage of justice, the HCA will hear both the special leave application and the appeal simultaneously, before issuing a final decision.

Clayton Utz

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Law and Practice in Australia

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Clayton Utz has been established for more than 180 years, and now has over 165 partners and over 1,600 employees across six offices in Australia. The firm continues to strengthen its reputation for innovative and incisive advice. The Clayton Utz competition group, based in the firm's Sydney office, provides a national service to clients and industry ranging from government to local Australian corporates, through listed ASX organisations to global organisations. The team contains five dedicated competition partners who work collaboratively with class action litigation colleagues in relation to antitrust follow-on actions as well as with regulatory and corporate colleagues in respect of regulatory matters and transactions. Recent clients include large Australian retailers, telecommunications providers and banks, mining and infrastructure companies, and global entities undertaking transactions in Australia.