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

C.The proposed grounds of appeal

With this in mind the CR advances four proposed grounds of appeal. The first two concern the analysis of the CAT in relation to the calculation of cost and the third concerns the evaluation of the CAT as to the justification for the differential between its findings on Cost-Plus and selling price. The fourth concerns the failure of the CAT to award compound interest, an issue which only arises if the applicant obtains permission to appeal, succeeds on the appeal and in due course prevails on the argument that some measure of recoverable damage was sustained. The proposed grounds are drafted as follows:

“Ground 1: The CAT erred in effectively disregarding BT’s entirely voluntary failure to produce relevant factual evidence on the indirect costs of SFV Services, in that (i) contrary to clear authority, and despite its criticisms of BT in this connection, the CAT, as it stated in J666, failed to give any significance to, or to draw adverse inferences from, BT’s failure to produce such evidence although it could have done so at a cost which was comparatively “modest” (J703); (ii) the CAT compounded this error by wrongly assuming that the burden of proof was on the CR rather than recognising the heavy evidential burden on BT (e.g. J777 and J904); and (iii) it was thus inappropriate to give much, if any, weight to the evidence of Dr Jenkins who was called as an expert witness by BT to “fill the gap” caused by BT’s failure to produce such evidence.

Ground 2: When deciding in J906 that 40% of BT’s common costs were attributable to SFV Services, the CAT relied on the so-called Stand-Alone Costs Combinatorial analysis (“SAC Combi”), which was (i) irrational, as the CAT had found that the SAC Combi was unreliable for a number of reasons (J842, 844, 855, 856 and 874); (ii) inconsistent with its endorsement of the evidence of the CR’s expert Mr Duckworth that the use of SAC Combi was inconsistent with the CAT’s decision in PPC (J662 and 864); and (iii) on a basis which was unreasoned and unexplained.

Ground 3: When considering whether BT’s excessive pricing bore a reasonable relation to economic value, the CAT: (a) wrongly focussed in J933-934 on the irrelevant fact that the excessiveness of the price charged by BT was “dramatic[ally]” different from that alleged by the CR”; (b) failed to address the relevant fact that the excess was substantial (25 to 49.9%), greater than in some other cases where unfairness was established; (c) failed to focus on a centrally relevant question, namely whether the SFV customers would have been prepared to pay excessive prices; (d) seriously misdirected itself in a number of other respects, namely: (i) adopting the willingness to pay fallacy – a fallacy which has been highlighted by the Court of Appeal (J960-961); (ii) assessing the evidence on switching on the basis of inconsistent reasoning (J1099-1134); (iii) misdirecting itself as to the meaning of the new concept of “distinctive value” (J8300); (iv) in its partially wrong and partially unexplained treatment of the Gives (J963-1032); and (v) in its partially wrong and partially unexplained treatment of brand value (J1135).

Ground 4: The CAT erred in holding that it could not award compound interest.”

D.Proposed Ground 1 - Expert evidence: The approach of the CAT to expert evidence relating to indirect costs of SFV services / the drawing of adverse inferences