Courage Ltd v Crehan

The Court of Appeal held that English law did not permit a party to an illegal agreement to recover damages, and so an action in damages would in any case be barred for Mr Crehan even if an article 81 action were successful.

The ECJ held that article 81(2) made agreements void, Mr Crehan could obtain relief, and in principle claim damages. A rule of national law that barred such a claim was precluded. It was true, as a principle of EU law, that a litigant should not profit from unlawful conduct, but this did not apply if the party did not bear significant responsibility for the distortion of competition, paras 22–28. At 32 it said to determine responsibility, the bargaining power of the parties and their conduct should be taken into account. At 34 it said a network of contracts could have a cumulative effect on competition, and the party who contracts with the one controlling a network cannot bear significant responsibility.

24 It follows from the foregoing considerations that any individual can rely on a breach of Article 85(1) of the Treaty before a national court even where he is a party to a contract that is liable to restrict or distort competition within the meaning of that provision.

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32 In that regard, the matters to be taken into account by the competent national court include the economic and legal context in which the parties find themselves and, as the United Kingdom Government rightly points out, the respective bargaining power and conduct of the two parties to the contract.

33 In particular, it is for the national court to ascertain whether the party who claims to have suffered loss through concluding a contract that is liable to restrict or distort competition found himself in a markedly weaker position than the other party, such as seriously to compromise or even eliminate his freedom to negotiate the terms of the contract and his capacity to avoid the loss or reduce its extent, in particular by availing himself in good time of all the legal remedies available to him.

34 Referring to the judgments in Case 23/67 Brasserie de Haecht [1967] ECR 127 and Case C-234/89 Delimitis [1991] ECR I-935, paragraphs 14 to 26, the Commission and the United Kingdom Government also rightly point out that a contract might prove to be contrary to Article 85(1) of the Treaty for the sole reason that it is part of a network of similar contracts which have a cumulative effect on competition. In such a case, the party contracting with the person controlling the network cannot bear significant responsibility for the breach of Article 85, particularly where in practice the terms of the contract were imposed on him by the party controlling the network.

35 Contrary to the submission of Courage, making a distinction as to the extent of the parties' liability does not conflict with the case-law of the Court to the effect that it does not matter, for the purposes of the application of Article 85 of the Treaty, whether the parties to an agreement are on an equal footing as regards their economic position and function (see inter alia Joined Cases 56/64 and 58/64 Consten and Grundig v Commission [1966] ECR 382). That case-law concerns the conditions for application of Article 85 of the Treaty while the questions put before the Court in the present case concern certain consequences in civil law of a breach of that provision.

Park J held that he was not bound by findings of fact by the Commission in 1999 that it was difficult to gain access to the UK beer market. The market had not been foreclosed, and so Crehan's claim was dismissed.

The Court of Appeal held that this probably conflicted with the commission's views, and so the High Court's decision was precluded. Damages were awarded.

The House of Lords held that the first instance judge's decision was to be restored. Conflicts between the commission's decisions and courts should be avoided, but the decisions were different enough that the Court of Appeal should not have interfered.