Lead Cartel Companies Fail to Get Costs in New Damages Case

THE TWO LEAD CARTEL COMPANIES defending a claim for damages have failed in their bid to be allowed to claim back the costs of the case even if they win.

In a case management hearing, Judge Hodge Malek KC said that if he allowed Associated Lead Mills Ltd (ALM) and H.J Enthoven Ltd (trading as BLM British Lead) (BLM) to apply for a security of costs order it “would stifle a genuine claim” brought by the cartel victim company: materials supplier and broker, Commercial Buyers Group Ltd (CBG Ltd).

The Competition and Market Authority (CMA) investigated the illegal collusion, price fixing, sharing market information and excluding CBG Ltd from the market. ALM and BLM pleaded guilty to forming a cartel in June 2020 and their directors were disqualified in the following year.

Now, the two companies are fighting the claim brought before the Competition Appeals Tribunal that their illegal activity put CBG Ltd out of business and for consequent damages.

‘Unfair Pressure’

In the hearing on 23 March 2023, BLM and ALM argued that, as the directors of CBG Ltd have modest incomes they can bring the damages claim with impunity. ALM’s barrister said the company was subject to ‘unfair pressure’ because CBG is secure in the knowledge that if they lose the case, they will not be able to pay the defendants’ costs. This means that CBG Ltd faces little risk from the litigation – which the cartel companies say is unfair.

The judge said that he cannot conclude that the defendants’ illegal activities caused CBG Ltd’s insolvency (that is to be decided in the full case). However, he also agreed that there is no realistic potential for ALM and BLM to recover costs even if they do win. Earlier in the hearing the judge had enquired whether the companies had sought mediation.

It was agreed by all parties that the costs of the case, scheduled to take five days, are likely to be close to, or exceed, the sum claimed in damages by CBG Ltd, of £750,000.

The judge said the case was “the simplest” case he’d had and that it is “a relatively straightforward case”. He urged all involved in the case to “cut back the costs” by crystallising the main points, deciding on what grounds it will be fought, and concentrating on the strongest points.

Calder Lead Role

Earlier in the hearing the judge asked for unredacted copies of the CMA lead cartel investigation findings report. This was to allow for evaluation of whether Calder Lead could have supplied CBG Ltd, despite CBG being excluded from the lead market by ALM and BLM.

The judge agreed to an order to allow third parties to the case to apply for confidentiality to protect their commercial interests. But he also said there is an obligation to disclose evidence relied on in the relevant parts of the CMA case files, as well as other documents that may not have been disclosed to the CMA.

The case to hear the claim for damages was scheduled for June 2024.

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