Evolving Private Remedies For Competition Infringements In Europe: Class Actions In The U.K.

Winds of change are blowing through Europe's national courts, beginning with a new antitrust damages Directive requiring changes in national laws to facilitate private enforcement of competition law. This step was a major change, and an equally significant development has taken place in the U.K., which will make it even more attractive to private enforcement. As of 1 October, 2015, the U.K.'s long-anticipated opt-out class action procedure will be available.

Given the general proximity between the U.K. and U.S. legal systems and with a body of U.S. case law that has been developed for over half a century, we can expect there to be close examination of U.S. class action procedures. Despite commonly expressed views critical of "the excesses of the U.S. class action system," U.S. class action jurisprudence, for better or worse, remains the only reference point for the U.K.'s new procedure. Put simply, to what extent will the responsible UK court look across the Atlantic for guidance and be able to benefit from it? What conclusions can be drawn, if any, for potential success of the new collective action system?

In this first in a series of articles examining recent EU developments, we address the U.K.'s collective action rules and compare them to key aspects of current U.S. class action practice. Next up will be a discussion of recent procedural enhancements and changes in U.K. competition procedures. Lastly, we will offer predictions of what we can expect to see from European Union member states in the course of implementing the private damages Directive required to be in place by December 27, 2016.

1. CLASS ACTIONS IN THE U.K.

   The U.K. courts have been driving the development of private enforcement, with France, Germany and the Netherlands being other important jurisdictions. Thanks to a broad interpretation of jurisdiction, existing rules on disclosure, and specialized courts conducting proceedings in English, the U.K. has become one of the most attractive venues for antitrust plaintiffs, though class actions have been scarce. Things are about to heat up even further. In effect, as of October 1, 2015, the U.K. government has enacted the new Consumer Rights Act 2015 (CRA15) as well as the most drastic amendments to the procedural rules extending the jurisdiction of the Competition Appeal Tribunal ("CAT")[1] since its creation in 2003, by adding competition law collective actions exclusively to its remit. In doing so it went further than any other European Government and to a large extent overcame the fear spreading through most European jurisdictions of opening floodgates to U.S.-style class actions.

   1. The Rules

   In addition to the preparatory legislative material, there are now three new sources in which rules are set out: 1. the CRA15, 2. the Competition Appeal Tribunal Rules 2015 and 3. the CAT Guide to proceedings 2015. An important fourth source will be case law interpreting these rules.

   1. Bringing a Collective Action

      Collective actions will have to be brought exclusively before the CAT. Before an action can proceed, the CAT must grant a collective proceedings order ("CPO"). The CAT will certify claims that are eligible for inclusion.[2] Three requirements must be satisfied:

      There must be an "identifiable class" such that it is "possible to say for any particular person, using an objective definition of the class, whether that person falls within the class."[3] Claims[4] must raise common issues, i.e., only claims with "same, similar or related issues of law and fact" are eligible.[5] This might require "the assessment of individual issues" which, however, is "not fatal."[6] After reviewing all of the circumstances, the CAT may approve collective proceedings in relation to only part of the claims.[7] For instance, the CAT may grant a CPO for the liability portion of the case and then "direct that the quantification of damages proceed as individual issues."[8] Claims must be "suitable" for collective proceedings as opposed to individual proceedings as determined by eight broad factors, including a fairness and cost-benefit analysis.[9] The CAT will decide whether the collective action will proceed as opt-in or opt-out.[10] In doing so, it will determine the "strength of the claim" and the degree of commonality and whether opt-in would be practical. It will also certify the representative who has applied to represent the class if it is "just and reasonable" to do so.[11] There was considerable discussion on that point during the protracted consultation process which was seen key to avoiding U.S.-style class actions in the U.K.[12] The Government...