New EU Directive Promoting Antitrust Damage Claims

Today, the EU considers that those affected by competition law infringement in some Member States are not able to effectively exercise their right to compensation. New EU legislation seeks to address obstacles to successful damages actions and regulate some key aspects of the interaction between public and private enforcement of EU competition law, but despite good intentions, the risk of unintended consequences is large.

According to the Commission, there are many companies affected by competition law infringements which are unable to obtain adequate redress. The Commission believes this is due to a lack of appropriate national rules governing actions for damages. Moreover, case law at national and EU levels has highlighted, in the Commission's view, the potential conflict between the EU right to compensation and effective public enforcement by the Commission and the national competition authorities ("NCAs").

In June 2013, the Commission launched an Antitrust Damages Initiative to (i) ensure the effective exercise of the EU right to compensation and (ii) regulate some key aspects of the interaction between public and private enforcement of EU competition law. This resulted in the recent adoption by the EU Parliament and the EU Council of the Directive on antitrust damages actions. Following its publication in the EU Official Journal, EU Member States will then have two years to transpose the Directive into their national laws.

This note highlights the key elements of the newly adopted EU legislation and the risks and opportunities it represents.

Access to Evidence

The Directive addresses information asymmetry (much of the evidence the claimant will need is in the possession of the defendant or a third party) and recognizes that it is appropriate to ensure that injured parties are afforded the right to obtain the disclosure of evidence relevant to their claim. However, the Directive also aims to insulate certain parts of the EU leniency programme and the settlement procedure from disclosure on the basis that disclosure would harm the incentive to come forward and thereby harm the public enforcement of EU competition law.

The key rules concerning the disclosure and protection of evidence are as follows:

EU national courts can order (subject to conditions) the defendant or an NCA to disclose evidence. To avoid "fishing expeditions," the disclosure of specified pieces or relevant categories of evidence should be circumscribed as precisely and as narrowly as possible - although there is a recognition that the claimant cannot be expected to specify evidence it does not know exists. National courts cannot at any time order the disclosure of leniency statements or settlement submissions made to the competition authority ("black-listed" documents). This contradicts the Court of Justice's judgment in Pfleiderer,1 where the Court decided that there was no general rule...