(by Andreas Stephan) The UK’s decision to leave the European Union has come as a shock to markets, politicians and indeed to many ‘Brexiteers’. Although protests demanding a reversal of the outcome and legal wrangling over Art 50 (the process for leaving the EU) continue, mainstream politicians have almost universally accepted the result (the obvious exception being in Scotland) and there is little evidence of public perceptions having shifted towards ‘Remain’ since the vote, despite accusations of a dishonest and misleading campaign by the ‘Leave’ camp. It is therefore almost certain that the UK will cease to be a full member of the EU. Bruce Lyons wrote about the (limited) advantages and (greater) disadvantages of Brexit for competition policy in an earlier blog, but here I suggest that much may remain the same regardless of what the UK’s new relationship with the EU ends up being. Read the rest of this entry »
(by Sebastian Peyer) In an earlier blog post I wrote about the new opt-out collective action regime introduced by the Consumer Rights Act 2015. This is not the only measure that is to help consumers and other injured parties to obtain compensation for the violation of EU and UK competition law. The new sections 49C-49E of the Competition Act 1998 provide powers for the Competition and Markets Authority (CMA) to approve voluntary redress schemes. This blog post considers whether these are a welcome innovation. Read the rest of this entry »
(by Sebastian Peyer) On 30 March 2015 the Consumer Rights Act 2015 received Royal assent, introducing opt-out collective actions into UK competition law enforcement. The UK system of private enforcement has long being criticised for being ineffective in compensating small businesses and consumers. The new opt-out procedures is hoped to encourage victims of anticompetitive conduct to seek redress in the Competition Appeal Tribunal (CAT). It mainly implements the changes suggested by the Department for Business, Innovation & Skill (BIS) that had consulted on options for reform in 2012. Opt-out collective or class actions are one mechanism to aggregate small individual claims. The success of class action rules depends on whether they provide enough incentives for representatives and law firms to bring these complex and costly legal actions. The general rules on litigation funding in the UK and the restrictions introduced with the Consumer Rights Act 2015 may make it difficult to raise funds to bring collective redress claims in the CAT. Read the rest of this entry »
(by Sebastian Peyer) The European Commission’s Damages Directive was recently signed into law and the Member States have been given two years to implement the rules of the Damages Directive into national law. In this blog post I argue that the Directive fails to achieve its stated goal of compensation because it does not reduce litigation costs or incentivise the bringing of costly legal actions. Instead, the Damages Directive seeks to safeguard public enforcement from private follow-on actions. It is therefore unlikely to facilitate greater levels of private enforcement. For the Damages Directive to become effective, it should be supplemented with further legislation to incentivise stand-alone actions. Read the rest of this entry »
(by Sebastian Peyer) After a decade of debate, consultation and guidance papers, DG Competition has finally released its draft Directive on actions for damages. It has been driven by the Commission’s desire to encourage private antitrust enforcement, currently deemed too low and mainly restricted to a small number of Member States, and the need to ‘optimise the interaction between public and private enforcement’. This second objective seeks to maintain the incentives for private firms to reveal cartels in return for leniency and engage in settlement procedures. A particular threat is posed by disclosure of leniency documents to third parties (e.g. Pfleiderer and National Grid). However, with rapidly developing litigation on the national level, there is a danger that aspects of the draft Directive are already behind the times. Read the rest of this entry »
(by Sebastian Peyer) Private antitrust enforcement is the least effective part of competition law in the UK. Yesterday, the government said what it intended to do about it. Its outline for a new regime of private actions in competition law followed a consultation on options for reform in 2012. It proposes fixes for a number of well-known litigation problems such as the limited jurisdiction of the specialist Competition Appeal Tribunal (CAT). However, of potentially greater interest to consumers and businesses will be the introduction of opt-out class actions. The debate about opt-out class actions has been fierce on national and EU levels but this is still a surprising move – will it work? Read the rest of this entry »
(by Morten Hviid) Should there ever be the possibility of awarding exemplary damages in a private follow-on action for breach of competition law? To my mind, the answer to this general question should be “NO”. To be a follow-on claim, there must already have been an infringement decision by a relevant competition authority. Where it finds an infringement, the competition authority is tasked with designing an appropriate punishment aimed at deterring and punishing the anticompetitive conduct. When the follow-on case is commenced, the matter of punishment has already been dealt with and non bis in idem [not twice for the same] should rule out subsequent exemplary damages. It should not be for a court or a Tribunal to run the case again as regards punishment unless this is as a result of an appeal of the original infringement decision. With no differences in the standard of proof, arguments that “the defendant should have been fined” belongs to an appeal of the OFT decision, not in a new action for damages.
On the whole this logic has been followed in the UK, for example in Devenish where Lewison J held (at ) that “the imposition of fines and an award of exemplary damages serve the same aim: namely to punish and deter anti-competitive behaviour”. However, based on a logic that, while a zero fine as a result of a leniency programme is still a punishment, immunity from a fine arising from an OFT policy decision is not, the Competition Appeals Tribunal [CAT] in their recent Cardiff Bus decision chose to award £60,000 in exemplary damages. Read the rest of this entry »