'Deliberately obfuscatory' class action claimants hit with costs

A collective action claimant who fended off questions about her failure to obtain funding for three years before withdrawing her claim has been ordered to pay immediate costs of nearly £1.5 million. Ruling in a claim over alleged price rigging by musical instrument makers, the Competition Appeal Tribunal found that claimant firm Pogust Goodhead had given 'unhelpful, uncooperative, deliberately obfuscatory and misleading' responses to inquiries.

Meanwhile, the behaviour of the proposed class representative (PCR) was 'unreasonable to a high degree and outside the norm of litigation practice,' Mrs Justice Bacon ruled in Sciallis v Fender & Ors.

The judgment followed what was originally scheduled as a preliminary issues hearing in a claim brought by Elisabetta Sciallis, a member of the Civil Procedure Rule Committee and a former policy adviser at Which?, against five manufacturers of musical instruments, including such renowned names as Fender and Roland. It followed a 2020 finding by the Competition and Markets Authority over the suppression of competition over retail prices. 

In the event, the hearing focused on costs after Sciallis revealed she had not secured funding for the proceedings and applied to withdraw them. According to the tribunal's unanimous judgment, negotiations with the funder originally identified in the claim, North Wall Capital LLP, had broken down by March 2023. 

The breakdown was not revealed to the tribunal, the proposed defendants or in subsequent out-of-jurisdiction filings against two further claimants, the judgment states. Responding to questions about funding, Pogust Goodhead said the proposed class representative 'is not required to provide a running commentary on any developments in her application'.

However in her judgment, Bacon stressed that proposed class representatives have a higher duty of candour than parties in conventional litigation. CAT noted rules require class and legal representatives to bring relevant material changes in the facts set out in the claim form to the attention of the tribunal and other parties, she said. The proposed class representative's failure to do this 'was unreasonable to a high degree and outside the norm of litigation practice]', the judge said.  

Likewise, Pogust Goodhead repeatedly refused to answer the enquiries made by the solicitors for Yamaha, Roland and Korg over three years from early 2023. The firm's statements were 'unhelpful, uncooperative, deliberately obfuscatory and misleading'. 

In her withdrawal application Sciallis accepted that she would be liable for the 'reasonable costs' or the proposed defendants. She sought for these to be assessed on the standard, rather than the indemnity basis as argued by the defendants. In total, they claimed £3.4 million. 

The tribunal found that Sciallis had not acted unreasonably when she filed her first claims in 2022 stating she was in the process of finalising a funding agreement. However costs from April 2023 were awarded on the indemnity basis. It awarded costs of £287,800 to Roland, £161,169 to Korg and £158,250 to Fender. The tribunal found Yamaha's and Casio's claims to be 'extraordinary' and 'inexplicable' respectively and ordered payments on account of £550,000 and £300,000, subject to assessment.