CA-2025-000517 - [2025] EWCA Civ 1061

The applicant’s submissions in detail

The CR complained in closing submissions that the failure of BT to generate this data was a culpable omission that should be met, on the part of the CAT, by the drawing of an adverse inference. The relevant evidence was exclusively in BT’s hands and, absent full disclosure by BT, its costs could not be scrutinised to assess whether they were “reasonably and efficiently incurred”. BT chose not to adduce such evidence, instead disclosing data on the indirect costs of BT Consumer as a whole, which was not disaggregated between different services and which did not identify BT Consumer’s common costs (Judgment paragraph [525]) and in respect of which the CAT observed that they “were not themselves the relevant costs” (Judgment paragraph [701]). In contrast, the CAT found that the method used by the CR’s expert, Mr Duckworth, to ascertain the indirect costs of SFV Services (the “RFS methodology”) was “at least an appropriate method” (Judgment paragraph [676]).

The CAT should therefore have (a) rejected Dr Jenkins’ evidence as not discharging the heavy evidential burden on BT; (b) drawn an adverse inference from BT’s choice not to adduce evidence of the costs of providing SFV Services; (c) held that it was not open to BT, in the light of that choice, to contend that the common costs of BT Consumer were material (much less of the magnitude estimated by Dr Jenkins); and/or (d) at the very least given much less weight to her evidence than it did.

Four particular criticisms are made:

Burden and standard of proof in the drawing of adverse inferences: The CAT failed to have regard to the principle in Sainsbury’s Supermarkets Ltd v Visa Europe Services LLC (“Sainsbury’s”) [2020] UKSC 24 and in other cases that where a claimant raises a prima facie case that a defendant’s prices are excessive relative to a costs benchmark, the defendant comes under a heavy evidential burden to provide evidence as to its costs because that evidence will be exclusively in its hands. The defendant must therefore produce that evidence to forestall the drawing of adverse inferences.

The failure to cross-examine: The CAT wrongly took into account that the CR did not cross-examine Dr Jenkins upon her scoring exercise.

Rationality and the duty to give reasons: The CAT erred because instead of rejecting Dr Jenkins’ evidence it relied upon it in determining the Common Costs Starting Point and this was irrational and unsupported by adequate reasons.

The need for deprecation: The approach of the CAT creates an unacceptable incentive for dominant firms faced with an allegation of pricing abuse not to produce direct evidence of their costs and the Court should take the opportunity to deprecate that approach.