Daniel Carall-Green and Victoria Green, led by Paul Stanley KC of Essex Court Chambers, and instructed by Geradin Partners, acted for Dr Sean Ennis in successfully obtaining an opt-out collective proceedings order in relation to Dr Ennis’s case against Apple for exploiting app developers. As explained in the previous post here, Dr Ennis’s case is that app developers have paid excessive and unfair prices in the form of Apple’s commission on sales made via the App Store.
At the certification stage, Apple argued that Dr Ennis’s case was infected by conflicts of interest. Part of Dr Ennis’s case on unfairness was that Apple imposed its commission on some but not all apps. Apple said that a necessary corollary of this was that, in the counterfactual, if Apple was not allowed to charge in the way it actually did, it would impose fees in respect of the apps that were currently free of the commission. On Apple’s analysis, this meant that Dr Ennis’s case was contrary to the interest of the developers who made such apps.
The Tribunal disagreed, holding that the question of conflicts of interest had to be assessed by reference to the counterfactual that Dr Ennis had actually put forward (which did not involve any redistribution of fees)—not to an alternative postulated by Apple. The Tribunal also clarified that a class representative’s duty is not to pursue different claims on behalf of different class members according to their various different positions, but rather to prosecute the collective proceedings in a way that furthers the interests of the group as a whole.
Apple also argued that Dr Ennis’s class had different interests in the outcome of the case: some of them would be entitled to more damages, and others to less (or no damages at all); some of them would have passed on more of their losses, and others less; and some of them would be more vulnerable to certain substantive defence arguments (e.g. that the claims fell outside the Tribunal’s subject-matter jurisdiction). Apple said that this also gave rise to conflicts of interest, and made the various class members’ claims unsuitable for combination in collective proceedings.
The Tribunal again disagreed, holding that it was important to avoid confusing differences between class members (which are to be expected) with conflicts of interest. Importantly, the Tribunal recognised that there will often be a distinction between the class representative’s obligations before distribution and the corresponding obligations during distribution. Before distribution, the class representative will seek to maximise the amount of damages recovered on behalf of the class as a whole. By contrast, at the distribution stage, class members will effectively compete for distributions out of that amount (which has by that stage been fixed). However, that kind of competition among class members does not put the class representative in a position of conflict of interest any more than a trustee distributing assets of a discretionary trust to rival beneficiaries is in a position of conflict.
The full judgment can be found here.
