With rising inflation, we’ve all come to accept that things often cost more than they used to, but recently, truck manufacturers were found by the European Commission to have been colluding over a 14-year period to purposely do just that; collectively keeping prices of new trucks high by acting as a cartel during the period 1997 to 2011.
Consequently, it held that those who bought or leased trucks between 1997 and 2015 had likely overpaid due to the collusion among the manufacturers on pricing, who had wrongly passed the costs for them having to meet environmental standards onto their customers.
The truck manufacturers accepted the court’s finding of involvement in cartel activity, and as a result, these manufacturers, including Volvo/Renault, Iveco, and DAF received a multi-billion euro fine from the European Commission in 2016. This paved the way for affected hauliers who had bought overpriced trucks to bring claims for compensation.
In 2018, the Road Haulage Association initiated a collective claim against the cartel on behalf of their members (and some non-members) to seek compensation in excess of £1 billion, which was approved by the Competition Appeal Tribunal in June 2022. The cartel brought an unsuccessful counter-argument, claiming that hauliers and businesses should bring compensation claims individually instead, meaning a protracted litigation process and increased cost, which in some cases, would have been prohibitive to some hauliers. In October 2022 the tribunal upheld that the RHA could indeed represent all the individual claimants as part of a group policy collective claim.
Despite ruling in favour of the RHA’s collective claim argument, the tribunal granted the cartel leave to appeal on the question of whether there is a conflict of interest between purchasers of new and used lorries, arguing that unless the claims are categorised into separate claims for new and second hand, with each aspect being quantified, then the claims would be invalid. They argue that if a manufacturer pays compensation in connection with the purchase of a new lorry, and that new lorry is subsequently sold on and becomes a second-hand lorry, they risk paying compensation twice on the same vehicle.
The RHA argue that it is for an independent expert to present evidence to the tribunal, so they can make a ruling on what is a fair and reasonable apportionment for new and second-hand lorries, and how to categorise the claims. These complex issues are ongoing and return to the tribunal later in 2023.
Clearly, the cartel is in no hurry to conclude the matter, and this protracted litigation is beginning to impact hauliers in different ways. Inevitably, given the passage of time, businesses are changing hands, or in some cases are ceasing to exist altogether upon the owner’s death.
Businesses with a legitimate claim who are considering selling their business (or buying another) should check their contracts carefully. If a claim has been initiated on the company’s behalf by the RHA, or any other body, then the asset should be considered so the right to compensation doesn’t inadvertently pass on without being considered at the point of the transaction.
Conversely if acquiring such a business either through inheritance or as a transaction, contracts should be worded to ensure sufficient protection of this claim. For example, the RHA can only bring a compensation claim on behalf of living members. In previous instances, the Duncan & Toplis team have found it necessary to intervene by approaching the RHA, asking for such claims to be protected. The RHA caution hauliers to be vigilant to these circumstances to protect their compensation claim. Another important point to consider is that operators will be called upon to show proof of purchase of affected vehicles, so it’s imperative that vehicle records are securely and accurately maintained.
Given the stance of the truck manufacturers, we don’t envisage the compensation issue being resolved anytime soon and would urge haulage businesses with a legitimate claim to act now to protect their future compensation. For any businesses or hauliers that are involved in these business transactions, it’s important to seek expert advice from haulage specialists, and give this important issue due consideration.
If we can help with this issue, get in touch with us today.