Daniel Carall-Green, instructed by Addleshaw Goddard, acted as sole counsel for NKT (one of the defendants) in a trial of a preliminary issue in collective proceedings brought on behalf of British consumers.
The class representative, Clare Spottiswoode, claims that the various defendants’ unlawful conduct in the power cables market caused an increase in consumer electricity prices. Part of the class representative’s case is that (i) increased prices for power cables drove up windfarms’ costs, (ii) those windfarms therefore received subsidies from the UK government which were higher than they would otherwise have been, and (iii) the way the subsidies worked meant that they were ultimately paid for by electricity bill payers. The class representative says that this is the causal mechanism behind over half the losses that she claims (around £275 million out of a total of £475 million). Crucial to the class representative’s case theory is the notion that, if the power cables had been cheaper (i.e., if there had been no overcharge), the subsidies would have been lower, and therefore consumers’ bills would have been lower.
The Tribunal ordered that part of the class representative’s case (specifically, the question whether subsidies would have been lower in 2009 and 2010) be tried as a preliminary issue, alongside the (full) trial of a claim brought by London Array, one of the windfarms.
The three defendants (including NKT), together with London Array, argued that, even if the overcharge was the class representative’s “high-case estimate” (26%), the difference in windfarms’ costs would have been too small to make any difference to the UK government’s overall assessment of the subsidies to be awarded to windfarms.
By the beginning of trial, the class representative had accepted that, even assuming the maximum overcharge of 26%, the subsidies would have been no different in 2009. Therefore, the only remaining question was about the subsidies in 2010.
In a hearing taking place over three weeks, the Tribunal considered contemporaneous documentary evidence from the relevant government department, witness evidence from a civil servant who had worked in that department, and expert evidence from four experts. The experts used various techniques to reconstruct what the government did, and to assess what it would have done if the input data used in the relevant calculations had shown lower cable costs (as the class representative alleged it would have done). The Tribunal ultimately concluded that, even on the assumption that the overcharge was 26%, the government’s decision on subsidies would have been no different in the counterfactual.
The result is that the class representative’s case on causation in large part fails.
The full judgment can be found here.
