On 17 January 2022, the Court of Appeal ruled that the CAT was correct in not permitting ball-bearing cartelist NTN to continue to trial and plead that any damages were mitigated, or avoided, through cost reductions.^[1]Court of Appeal (Civil Division) 7 January 2022, [2022] EWCA Civ 16, Case No: C3/2021/1441 & A. The position taken by NTN was that purchasers offset any increase in prices by decreasing prices elsewhere, i.e. by securing increased discounts from other suppliers (than the cartelist(s)). In particular, the question was whether such a defence would be permissible without any actual evidence that the claimant did in fact mitigate its loss in this manner but only upon the hypothetical basis that it is a “reasonable” inference that can be drawn that the purchaser would have mitigated its costs in this manner.

The Court of Appeal found no errors in the CAT’s ruling and agreed with its conclusion that NTN’s pleadings failed to meet the appropriate test to proceed to trial. The Court of Appeal agreed with the CAT and concluded: “I agree that the pleaded offsetting defence lacks particularisation or evidential underpinning. It is hypothetical and theoretical and, in some respects counterintuitive. It lacks realism. There are no policy considerations which justify permitting this defence to continue to trial.”.  

In other words, the appropriate test does require actual evidence and a mere hypothesis is not sufficient in order for a defence to be allowed to proceed to trial.