Cousins update: Swatch v Cousins

[Neverenoughwatches]

On 4/10/2022 at 1:01 AM, Neverenoughwatches said:

I thought it was stated the fund was to be used or as much of it as necessary to research  and determine the industry size in the UK. Then use this information to convince our government the industry  is worth saving and then take a legal standing against  the Swiss. If the Swiss are ignoring email enquiries, then I imagine any kind of meeting will be totally dismissed. It's been in the planning for 20 years probably  more. I have wondered  if this is their payback for the quartz crisis, I don't believe  the UK had any involvement though I could be wrong. A blanket payback if you will. Surely other companies could step in and make production, I wouldn't know about patents on parts though. And obviously a collective companies effort would be needed for such a massive demand. I thought Seagull made reasonable replacements. Someone would surly grap such an opportunity  to fill the gap. Would be a proud two fingers up if our UK could make it happen.

Is it not a simple solution to just inform the public about this, they won't even need to be convinced not to buy Swiss anymore would they ? I wouldn't buy anything that couldn't be repaired in my own country or by the independent watchmaker that I'd been using for the last 20 years. Nobody likes being held ransom. 

[tututim]

Having recently got into watches and repairing and I got an update on the Cousins v Swatch from Cousins today. I didn't even realise it was an issue until today. I suppose its inevitable that you will bump up against the politics once you are closer to an area of interest.

I was looking to get a Omega watch as a present to myself - and now that will be scrapped and an alternative found.

I do concur with the previous post and my thoughts here - there are people who would shop differently if informed by the issue, I suppose the question is how?

In terms of impact - can anyone help me understand - if I want my quartz Longines serviced I got an online quote of GBP 165 (I was shocked by this) or GBP 180 from Longines - what would it typically be from an independent? i.e. what is the impact to the consumer?

[Neverenoughwatches]

1 hour ago, tututim said:

Having recently got into watches and repairing and I got an update on the Cousins v Swatch from Cousins today. I didn't even realise it was an issue until today. I suppose its inevitable that you will bump up against the politics once you are closer to an area of interest.

I was looking to get a Omega watch as a present to myself - and now that will be scrapped and an alternative found.

I do concur with the previous post and my thoughts here - there are people who would shop differently if informed by the issue, I suppose the question is how?

In terms of impact - can anyone help me understand - if I want my quartz Longines serviced I got an online quote of GBP 165 (I was shocked by this) or GBP 180 from Longines - what would it typically be from an independent? i.e. what is the impact to the consumer?

I have a very dirty word to use when i reference swatch, its unlikely to be allowed here . Restrict parts and then kick us in the teeth by releasing watches  that everybody wants. Unfffingbelievable Midland bankers.

[Vich]

Hello Neverenough,

I am curious to know if your quotes included the secure postage costs, sometime (a long time) ago before I joined this forum I was involved in sending my Glycine Airman to Switzerland and the postage costs were to say the least eye watering.

I chose to send it to Glycine direct as I could not bring myself to put it into anyone elses hands due to my own sentimentality.  Perhaps another member may point you towards an independent repairer specialising or acquainted with Longines.

I must say that I have to give Cousins credit for their tenacity in this long drawn out battle !

Apologies to Neverenough, I think I should have addressed my post to Tutuim

[Vich]

Message from Anthony Cousins:-

At Long Last the Fight for Parts Supply is Going to the High Court

 

Cousins battle with the Swatch Group is now heading to the High Court in London. However, after the ruling in Switzerland, the case in London commences with arguments that you might not be expecting. Anthony Cousins explains the details below:-

 

 

It has been more than a year since I last updated you on our legal battle with the Swatch Group to overcome their refusal to openly supply spare parts. Doubtless some of you will think that we have gone quiet because we have given up, but nothing could be further from the truth. When we started this process, I made a commitment to keep fighting until we won the day, or had exhausted every available means. That fight has continued and has now reached a significant milestone.

 

In December of 2021, the Commercial Court of Bern gave a verdict that ran contrary to the most fundamental principle of British and European Competition Law, which is that no matter can be decided without consideration of the impact upon UK consumers and competition in the UK. We supplied the court with overwhelming evidence to show that watch owners are suffering substantially higher prices for servicing and repair, are waiting significantly longer for their watches to be returned, have an extremely limited selection of locations where they can obtain service, and are frequently obliged to have work done to their watches that is not necessary and that they do not want. We also asked the court to engage independent expert witnesses to advise them on how British Competition Law is applied and decided. The Bern Court refused to consider any of that evidence, declined to employ any expert witnesses, and determined that Swatch was “objectively justified in changing its supply chain. In so doing, the Bern Court did not consider at all any of the evidence we provided on the impact of Swatch’s cessations of supplies on UK consumers and competition in the UK.

 

As we reported in August of 2022, we appealed against this ruling to the Swiss Federal Supreme Court (FSC), pointing out in detail why the interests of consumers and competition are always paramount. Our experience of the FSC has not been good. Twice before the Bern court ruled in our favour, and on both occasions the FSC changed the Swiss Civil Code and found in favour of Swatch. Although our arguments were entirely correct, it came as little surprise when in September of last year, the FSC refused our appeal and found again for Swatch.

 

It is outrageous that a foreign jurisdiction thinks it can alter the basis of a UK law, without even asking for any opinion on this from this country, and at the same time ignore a wealth of factual evidence that has been placed before it. I have no doubt that the Swiss judicial system is not a suitable forum to give rulings on British and European law, but explaining in detail why is an issue for another day. However, for you as the reader to understand what actions we have taken subsequently, it is necessary that you understand some basic points about why the Swiss had the right to rule on British and European law in the first place.

 

Brexit had not happened when the case started back in early 2016, and an agreement existed between the EU, Switzerland, Iceland, Norway, and Denmark, called the Lugano Convention. This treaty deals with how cross border disputes between parties in the different countries should be managed in the courts, and in simple terms stated that all the signatories to the convention recognised each other’s judicial systems as being equal, and gave each other the right to rule using whichever country’s law was applicable. In our case this meant that a dispute between a British company and a Swiss company about a matter of British (and EU) law could be dealt with by either country’s courts.

 

When we first wrote to Swatch about taking legal action, we told them that we would be taking them to the High Court in London if they did not resupply us within three weeks. To avoid that, they brought a claim against us in the Bern court without, however, telling us that they were doing this. But this did mean that the proceedings were supposed to be dealt with using British and EU law, not Swiss law. I am not going to detail the whole case again here, but for what follows to make sense, there are four significant points I must explain about how this relates to the Lugano Convention in our case.

 

Firstly, the UK was (when the case began) bound by the Lugano Convention because it was a member of the EU, but when Brexit happened half way through our case, the UK was no longer part of the convention. The UK government applied to join the convention, and whilst waiting for a decision from the other members, held that any case started under Lugano rules would continue to be bound by them. Over a year later, the EU was still refusing to agree that the UK could join the convention, so the rules applicable in our case became somewhat less clear, and indeed before the final appeal was heard at the FSC, the Swiss courts declared that the convention was no longer applicable, and the final appeal was conducted under different rules.

 

Secondly, all EU members use the same wording in their competition laws that appears in the EU Treaty, the only minor and required difference is that where the EU Treaty says ‘in the EU’, the UK Competition Act says ‘in the UK’. As part of the Brexit process, although the basics of UK Competition Law stayed the same, Section 60a was added to the Competition Act which allows UK law to deviate from EU law, so the two cannot be considered to be the same.

 

Thirdly, under the terms of the Lugano Convention, if a matter is decided in one country then all the others are bound by it, and the courts of those other countries cannot review or overrule the decision, or hear the matter again, even if they are certain that the foreign decision is wrong. This is part of a wider legal principle known by the Latin phrase “Res Judicata”, which loosely translates as “This has already been Judged”. The point of this is to prevent a matter being repeatedly litigated, and to avoid conflicting judgements in different countries.

 

Fourthly, under the terms of the Convention, the only action another member country can realistically  take, is to refuse to recognise the foreign decision if it is ‘contrary to public policy’, but this has to be something other than the law applicable to the decision concerned, for example if one of the parties right to a fair trial was breached. As highlighted in the point above, it is not possible to argue that the Swiss courts did not apply Competition Law correctly. That would be ‘reviewing’ the case, which is expressly forbidden.

 

Keeping these four points in mind, the actions that Cousins have now taken can be understood.

 

When Swatch wrote to us in 2016 to say that they had lodged their claim with the Bern Court, there was a delay whilst we were waiting for the papers to be served on us. In that time period, we lodged our claim at the High Court in London in the expectation that the proceedings in Switzerland would not be admissible. Normally, a claimant has only three months to serve the papers on the other party, but because of the extraordinary nature of how the Swiss proceedings played out, we applied to the High Court for extensions to that time period, and in the end were granted a very exceptional ten of them. This meant that when the final FSC verdict came in, we still had a live claim that we could use.

 

After lengthy consultation with our UK legal team, we identified two ways in which we believe the UK courts have valid reason not to recognise the Swiss decision, which in turn would allow us to bring the case again in the High Court, and have a British Judge decide a matter of British law concerning British markets and British consumers.

 

Firstly, both the UK and Switzerland are signatories to the European Convention on Human Rights (ECHR), and it is contrary to public policy for the terms of that convention to be ignored. A crucial part of the ECHR is that parties in a legal action ‘have the right to be heard’. For this requirement to be met, it is vital that any evidence offered is considered by the court hearing the case. This did not happen in Bern.

 

Secondly (as I explained above) after Brexit, UK Competition Law had the right to deviate from that of the EU. The Bern court did acknowledge the addition of Section 60a to UK law, but continued to regard UK law as being the same as that of the EU, and made its judgement on that basis. It is therefore true to say that UK Competition Law has not been applied at all, so it is not correct to claim that the matter has already been judged.

 

In July this year, we served our High Court claim on Swatch (UK), and had the High Court start the process of serving on Swatch Group and ETA in Switzerland. The process of serving on foreign companies takes a few months, but Swatch UK received the claim within two days, and were required by the rules to enter a defence within six weeks. As we expected, Swatch responded by stating that this matter was already decided, and they applied to the High Court to have the claim struck out.

 

We objected to the application on the grounds that I have explained above, and after some debate back and forth, it was agreed that there would be a one day hearing before a Judge in the High Court in order to decide whether or not the Bern verdict should be recognised in UK law. In simple terms, if the Bern decision is recognised, then there is little else that we can do. However, if the Bern decision is not recognised, then our current claim will continue and a longer hearing will be timetabled at which the evidence will be considered, and a ruling will be given under British Law. We are very confident as to what that ruling would be. On Monday of this week the administrative team at the High Court processed possible dates for the hearing, and it has been confirmed to us this will be the week commencing 26 February 2024.

 

Whilst I am sure that there will be much interest within the watch repair world, this case has far greater significance. The Bern decision is not confined to watch parts, but covers wholesaling and other forms of distribution of any product in any market. If that decision is recognised, then small businesses in every sector who can not compete with the buying power of their larger counterparts will find themselves either out of business, or under the direct control of the manufacturers, and the big loser in the end will be the consumer.

 

I never imagined when all this began that Cousins would end up fighting to uphold the basic principles of UK business law, but if that is what we need to do in order to preserve the right of our customers to continue to offer their services to UK consumers as they have done for Centuries, then that is what we will do.

 

I will keep you updated as matters progress.

 

Regards,

Anthony

[LittleWatchShop]

Great update!

[SpringMangler]

This must be costing Cousins a significant amount of money, and they should be supported not just by this community but by all businesses who are at the mercy of monopolistic practices.

Surprised that they can't get other businesses to become involved as Intervenors. It's something we do when taking cases to the Competitions Appeal Tribunal. 

[rehajm]

Here's the 20 February, 2024 update from Cousins in case they haven't sent you one...

Cousins in High Court Next Week

Fighting for Parts and Now Fighting for UK Law ALSO!

 

Since deciding last year to serve our High Court claim on Swatch, Cousins has been very active in explaining to the outside world what the consequences of the Swiss verdict will be if it is recognised here in the UK. Of necessity, we have had to stay silent about this work, but as it has now been included as part of our evidence to the High Court, we can reveal more about it.

 

At the end of my last news story (https://www.cousinsuk.com/page/news), I outlined that the Swiss decision affects wholesaling in any industry, but the true extent of its consequences go way beyond that. At the simplest level, the ruling opens the door to manufacturers being the sole source of supply for anything, which in turn gives them the power to control or eliminate wholesalers and other intermediate markets such as retailers or repairers, with potentially devastating consequences for long standing government policies on consumer rights, sustainability, and the right to repair. However, at a higher level are two issues relating to the function and creation of UK law.

 

The basis of UK and EU Competition Law is the protection of consumers, which in all but the most exceptional of circumstances is achieved by maximising competition in every market, to give consumers the capability to choose the price and service levels that suit their individual requirements. Consideration of the effect on consumers and competition is the core principle of the law itself and has been at the core of every judgement in Competition Law, but the Swiss verdict creates a precedent which eliminates that principle. If that is acceptable in one part of the law, inevitably it will be argued that other parts of the law need not consider the effect on consumers.

 

Setting of precedents is a normal part of the legal process, but those precedents have to be in line with principles of the law, not acting in reverse of them. The Swiss verdict has raised serious issues about firstly, whether or not the actions of the Swiss courts comply with the treaties that exist between our countries, and secondly whether it is acceptable for a foreign jurisdiction to interfere with the base principles of UK law.

 

Cousins very quickly brought these issues to the attention of the Department for Business and Trade (DBT), and our Trade Attaché in the British Embassy in Switzerland, both of whom reacted positively and promptly. The issue was extremely pertinent at DBT, because the Minister for Trade was just commencing talks on a new Free Trade Agreement with Switzerland.

 

Our local MP, Sir John Whittingdale OBE, came to our offices for a full briefing within 48 hours of being notified of the issue, and with his assistance the matter has now been brought to the attention of no less than six government ministers and four departments, including the section within the Ministry of Justice that deals with international treaties.

 

In addition, Cousins has been very active in engaging with the UK Competition and Markets Authority, who have examined in detail the papers relating to next weeks’ High Court hearing and have taken the highly unusual step of writing to us to indicate their potential interest in the case if the Swiss decision is not recognised. In itself, this might seem to a layman to be a rather ineffectual action, but it has much greater significance in the legal world.

 

“Global Competition Review” is probably the leading subscription news service for Competition Law professionals in the UK. They are frequently the first source for their readership on the most significant stories in that sector, and with their kind permission reproduced below is an article they published ten days ago. You will be pleased to learn that the article very quickly made its way into their “Top 5 Most Read” list.

 

I hope to get one more update out to you before next week’s hearing.

 

Regards,

Anthony

[Vich]

Thanks for posting the update which I only just noticed, amazing how Cousins are really stepping up and fighting on.

vich

[Vich]

News Update 29/02/2024

 

Yesterday Cousins and its legal team went to the High Courtin London to oppose the application by Swatch to have our UK claim struck out. The case was heard by Mr. Justice Michael Green, a High Court Judge who also sits in the Competition Appeal Tribunal.

 

In previous news stories, I have explained the arguments that we intended to bring, and I will not repeat them here. However, I am in no doubt that by the end of the day, Judge Green had a full picture of the consequences for Competition if Cousins action is not allowed to proceed. It was noteworthy that the Competition and Markets Authority sent a member of their Legal Team to observe proceedings from the Public Gallery.

 

As expected, after more than five hours of evidence and legal argument, Judge Green advised that he would consider the matter further and release a written verdict in due course.

 

Afterwards, our legal team said that the case had gone as well as it could have done, and better than they had thought likely.

 

There is no fixed timetable for the verdict, it entirely depends upon the workload Judge Green has, but we hope to be able to advise you of the outcome in a matter of weeks rather than months.

 

Regards

 

Anthony