"Not merely a figurehead"

Competition | 31/01/2025

The CAT's judgment in Riefa provides insight into how the CAT will evaluate whether a proposed class representative has met the authorisation condition, and shows that they will be held to a high standard.

1. Summary

The trend in collective proceedings since the Supreme Court's decision in Merricks has been in favour of certification, even if, in some instances, the Tribunal has required claimants to redefine the proposed class or reformulate the proposed methodology for establishing class-wide loss. However, the Tribunal's recent judgment in Christine Riefa Class Representative Limited v Apple Inc., Amazon.com, Inc. & Ors [2025] CAT 5 represents a departure from that trend, and the first occasion on which the Tribunal has refused to certify collective proceedings solely on the basis that the applicant should not be authorised to act as class representative. This article explains the Tribunal's decision and sets out some salient takeaways for practitioners.

2. The judgment in context

The proposed collective proceedings alleged that Amazon and Apple entered into agreements which increased the price and limited the number of resellers of Apple products sold on the Amazon UK Marketplace, in breach of the Chapter I prohibition. The proceedings were 'standalone' – i.e., this was not a 'follow-on' claim brought pursuant to an infringement decision. The proposed class representative ('PCR') was Christine Riefa Class Representative Limited, a private company, incorporated for the purpose of the litigation, whose sole member and director was Professor Christine Riefa, a law professor at the University of Reading.

Prof. Riefa sought aggregate damages on behalf of a proposed class of over 36 million UK consumers who purchased Apple and Beats-branded products. The total loss for purchases on Amazon, excluding other retail channels, was estimated at £494 million, before interest.

The certification application was considered at a hearing in July 2024. During that hearing, the Tribunal expressed concerns regarding the funding terms and the suitability of the PCR and directed the PCR to file evidence to address those concerns. A further hearing was listed for September to consider that evidence. At the Tribunal's invitation, the Defendants sought, and were granted, an order for permission to cross-examine Prof. Riefa at that hearing.

There are two conditions that must be fulfilled if the Tribunal is to make a collective proceedings order ('CPO'). First, the Tribunal must be satisfied that it is "just and reasonable" for the PCR to act as a representative in the proceedings (the 'authorisation condition'). Second, the claims must be eligible for inclusion in collective proceedings; specifically, they must be brought on behalf of an identifiable class of persons, raise common issues and be suitable to be brought in collective proceedings (the 'eligibility condition'). The Tribunal concluded that the PCR had failed to satisfy the authorisation condition, and therefore refused to grant a CPO.

3. The Tribunal's key concerns

The Tribunal concluded that Prof. Riefa had not established that she had a clear view of the proposed class's best interests, or that she was suitable to act as their independent advocate. This conclusion was cumulative, based on several concerns that Prof. Riefa failed to assuage.

3.1 Inadequate understanding of the funding arrangements

In a witness statement filed prior to the July hearing, Prof. Riefa stated erroneously that Asertis, the litigation funder, would be paid from unclaimed damages – i.e., damages available after distribution to class members. In fact, the litigation funding agreement ("LFA") contained an unqualified obligation, which required the PCR to apply for an order for payment directly from the award, rather than from undistributed damages. If granted, this would mean that payments to Asertis, and the PCR's lawyers, would rank ahead of any payment to the class; an arrangement that the Tribunal described as "inimical to the interests of the class". The Tribunal agreed with Amazon that this error suggested Prof. Riefa may have satisfied herself that the arrangements were reasonable based on a misunderstanding of the terms of the LFA.

Following the July hearing, the LFA was amended to qualify this obligation; the PCR would only be required to make such an application "where it is appropriate in all the circumstances". During cross examination at the September hearing, Prof. Riefa's grasp of this provision was tested and found wanting. The Tribunal concluded that Prof. Riefa "did not really understand how the new clause … would operate in practice", and, more generally, "did not demonstrate that she had a strong understanding of the arrangements she had entered into".

3.2 Insufficient assessment of whether better funding terms may have been available

Furthermore, the Tribunal was not satisfied that Prof. Riefa had ascertained whether better funding terms may have been available. Notably, the LFA was amended following the Supreme Court's judgment in PACCAR, to provide that in certain circumstances Asertis would be remunerated in accordance with its internal rate of return (IRR). The Tribunal was dissatisfied with Prof. Riefa's evidence that it was not, at this juncture, "immediately obvious" that alternative sources of funding were available; this supposition had not been properly tested.

3.3 Failure to take (or make provision for) independent advice

The Tribunal stressed the importance of a PCR acting as an “independent advocate for the class”. The Tribunal was concerned by Prof. Riefa's failure to seek independent advice on the LFA, but also by her having given inadequate regard to the need for independent advice at future stages of the litigation; for example, in determining the circumstances in which it would be "appropriate" to apply for an order for the funder to be paid in priority to the class. The Tribunal described the establishment of a (partially staffed) consultative panel as “much too late” to address these deficiencies.

The Tribunal's concerns were exacerbated by what it described as "indications of a lack of attention to detail". By way of example, the Tribunal referred to issues with the ATE insurance policy, which were remedied prior to the certification hearing, including the fact that it failed to cover all the proposed defendants, or all aspects of the proposed claim. Such issues, taken individually, may not have been cause for concern, but assessed cumulatively they gave the Tribunal the "impression of insufficient control being exercised over the litigation process".

4. Commentary

The Tribunal's judgment in Riefa is an example of the CAT exercising its role as a gatekeeper in collective proceedings, to ensure that a PCR meets the high standards required to represent a class effectively. The judgment makes clear that to satisfy the authorisation condition, a PCR must demonstrate their capability to act robustly in the class’s best interests.

The judgment sets a precedent for defendants to a certification application to apply for permission to cross-examine the PCR at the certification hearing, where there are credible concerns as to the PCR's understanding of the applicable funding arrangements, or potentially other issues pertinent to the class's interests.

The Tribunal's judgment is also notable for its adoption and endorsement of the principle outlined in Gormsen v Meta [2024] CAT 11 that the Tribunal should be "reluctant to venture into an assessment of the commercial terms of the LFA unless they are sufficiently extreme to warrant calling out". But this is distinct from the PCR's understanding of those terms, and the steps taken by the PCR to ensure they properly protect and advance the interests of the class.