Enterprise Act: Which? signs up City firm Clyde & Co on CFA to bring representative case


City firm Clyde & Co has teamed up with consumer group Which? to launch an unprecedented competition enforcement action over football shirts price-fixing.



They are set to seek damages from retailer JJB Sports under provisions introduced by the Enterprise Act 2002 that allow consumer bodies to bring a representative action before the Competition Appeal Tribunal (CAT) once companies have been convicted of cartel activity, or other breaches of the anti-competitive practices.



JJB was fined £6.7 million as one of seven members of an illegal cartel found to have fixed the prices for England and Manchester United football shirts in 2000 and 2001. The appeals process has now been exhausted after the House of Lords recently refused permission, allowing Which? to threaten its action.



Following a pitch, Which? hired Clyde & Co to advise under a conditional fee agreement. Which? campaigns lawyer Ingrid Gubbay said the consumer group does not have the in-house legal resources to deal with a case that will be administratively heavy, as it is an opt-in system and individual consumers will need to prove purchase.



Mark Warrington, an associate at Clyde & Co, acknowledged that this could prove hard several years after the event. A receipt or credit card statement, along with the shirt itself, would be ideal, but he said 'it is also a matter for the CAT to adjudicate on evidence such as pictures of the shirt' - such as the consumer wearing it on holiday. There may also be an application to the CAT for disclosure of JJB's customer records.



Then there is the problem of encouraging the estimated one million people who bought affected shirts to lodge a claim where their loss may be quite small - perhaps no more than £20. Which? is exhorting people to take part so as to send 'a clear message to companies that consumers won't stand for being ripped off'.



Which? and Clyde & Co are also considering a rare claim for exemplary damages, which can be awarded where the defendant has deliberately calculated that the damages he has to pay will be less than the profit made.



In a statement, JJB said it will respond after hearing formally from Which? and consulting its lawyers. It continues to deny illegal price fixing and said its margins on football shirts are far lower than other publicly quoted retailers. It is also offering customers who can prove purchase of an affected shirt a free current England away shirt.



This action comes against the background of a European Commission Green Paper on encouraging the private enforcement of competition actions, while the Department of Trade & Industry consulted last year on introducing representative actions in consumer protection cases.



Neil Rose