Damages Actions For Competition Law Infringements In The EU – New Law Finally Adopted

On 26 November 2014 the EU adopted a Directive on certain rules governing actions for damages under national law for infringements of competition law1. The Directive seeks to harmonize the relevant laws across the EU by setting the procedural framework under which such actions can be brought in any of the EU Member States. The Member States must transpose the Directive's provisions into their own legal systems and, thus, adopt relevant national laws by the 27 December 2016.

Background

The Directive is the culmination of a long process that was triggered by a seminal judgment rendered by the EU Court of Justice in 2001. In Courage and Crehan2, the highest Court of the EU ("CoJ") ruled that the right to seek compensation for loss caused by infringements of competition law rules is open to any individual. Such compensation is foreseen for all antitrust infringements, that is both for abusive conduct by dominant companies and for cartel-like behavior.

In the EU, damages actions for antitrust infringements have been (and arguably still are) the exception. Competition law enforcement had traditionally been considered as an administrative task and, hence, the fines imposed by the competent author around the world) were seen as the only threat for companies involved in anticompetitive conduct. Moreover, elements such as the diverse legal systems around the EU (that is comities (which are amongst the highest mon law and civil law systems), or the lack of knowledge on the part of the potential claimants of their rights rendered such actions scarce. In recent years, such actions have increased but they remain at a very low level, with only 25 percent of antitrust infringements being followed by such actions according to the Commission.The Commission has estimated that because of ineffective private enforce3 ment, antitrust victims forgo up to an estimated EUR 23 billion in compensation every year.4

The Commission considered that the introduction of private damages actions is an important element that would complement its enforcement powers against illegal antitrust conduct. However, the Commission recognized that its plan to encourage such actions faced both difficulties and complexities. On the one hand, it had to bring together the very different legal traditions of its 28 Member States and deal with an array of process issues, such as limitation periods and the quantification of the harm caused by the contested antitrust conduct. On the would not undermine the effectiveness of existing tools in the fight against cartels, such as the Commission's leniency program or the settlement procedure, which could be compromised by litigation discovery rules. More precisely, the Commission's leniency programme requires that a member of a cartel makes statements, often self-incriminatory, in exchange for full or partial immunity from fines. Similarly, settlements are based on such statements. If these self-incriminatory docuother, the Commission has to ensure that such actions ments were discoverable through litigation, there was serious concern that companies would be unwilling to make such statements. The Directive appears, at least at first sight, to have made all ends meet. The key provisions are listed below.

Compensation

The Directive establishes the right to compensation for victims of antitrust infringements. In this regard, it provides for full compensation for the actual harm suffered by the claimant. It explicitly rules out overcompensation whether by means of punitive, multiple, or other types of damages.5

At the same time, mechanisms other than litigation are identified to obtain compensation such as out-of-court dispute resolutions (arbitration, mediation, settlements) and to this end the Directive provides for the process issues that would help such mechanisms to be successful.6

Easier Access to Evidence

Under...