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National Report – United Kingdom

Anneli Howard, Anneliese Blackwood and James Bourke

 

I. General Questions on Private Enforcement of Antitrust Law

 
Question 1

The ruling of the ECJ in Courage did not really have a substantive effect in the UK because the right to damages for breaches of competition law had already been recognised since 1984 in Garden Cottage Foods. However, Courage did represent a jurisprudential milestone which provided legal certainty and greater confidence for claimants in bringing such claims. Manfredi increased that confidence further by clarifying the rights of indirect purchasers further down the supply chain and the fact that there was no need to prove fault in order to establish a claim. The combination of those two judgments therefore kick-started the current momentum behind damages claims in the UK.
The principle of effectiveness has been useful for national courts and parties to disputes in ensuring their right of access to justice. However, the principle of equivalence has not really played much role as the UK’s Competition Act 1998 (CA98), which came into force on 1st March 2000, already recognised the right to damages. In the UK, the right of action for competition damages is usually founded on a tort for breach of statutory duty based on Articles 101 and 102 or their domestic equivalents in ss2 and 18 of the CA98. The Court of Appeal held in Newson that damages actions can extend to torts other than a breach of statutory duty.
 
Question 2
Private enforcement is used in a number of claims, whether actively by seeking contractual remedies or tortious damages or defensively to strike out or resist a claim for contractual enforcement. It is also used under the Civil Procedural Rules (‘CPR’) Part 8 whereby the parties can seek a declaration from the judge for an interpretation of a particular contractual clause. Injunctive relief is available from the High Court and, since 1st October 2015, the Competition Appeal Tribunal (‘CAT’). Injunctions may be prohibitive in nature (e.g. forcing the defendant to restrain from certain anti-competitive practices) or mandatory (e.g. requiring the defendant to supply the claimant with products or permit access to an essential facility or licence intellectual property rights).
In the UK, restitutionary remedies are only permitted exceptionally in cases where it is not possible to quantify compensatory damages (see Devenish v Aventis). However, exemplary damages are available, in exceptional circumstances where there has been no public law fine imposed on the undertaking and where the accused has deliberately engaged in anti-competitive behaviour with a view to making a profit at the victim’s expense.
 
Question 3
Claims for declarations of nullity of contracts are often pleaded in ordinary proceedings but are not really pursued – they are really a bolt-on to the main damages claim. There have been cases where applications have been made under CPR Part 8 for a declaration of the parties’ legal rights under a contract (see E.On v EWS), but these are relatively rare. Most disputes regarding contractual uncertainties are resolved by commercial settlement or mediation without the need for court proceedings.
Claims for injunctive relief have been relatively infrequent because of the onerous burden on applicants to establish urgency, a prima facie breach of competition law and the balance of convenience. Numerous injunctive applications have failed at the last hurdle because the claimant cannot show that damages would be an inadequate remedy or that it will go out of business without the injunction. Those difficulties should be reduced now that the CAT has specialist jurisdiction to grant injunctions for SMEs on a fast track basis. Most importantly, the applicant will no longer need to provide a cross undertaking in damages should the overall proceedings be unsuccessful. That has acted as a major deterrent for bringing injunction applications in the High Court, and it is expected that the number of injunctions will increase, particularly as the CAT is now permitted to award injunctions on a fast track basis, where the hearing will last less than three days.
Claims for compensatory damages are increasingly more prevalent, with most Commission Decisions resulting in follow on claims being brought, including by a number of well-established claimant law firms. Stand-alone claims are also on the increase, although to a lesser extent.
Claims regarding forfeiture of profits have been attempted but, since Devenish, have not been brought on a self-standing basis. A claim for restitutionary damages or for an account of profits may often be added as a bolt-on to the main claim for compensation, but in most cases are abandoned. There are plenty of cases where the claimant may not be able to establish its loss (especially where it may have passed the overcharge on down the supply chain), but it may still want to strip the defendant of any gains that it has made from its participation in the unlawful cartel. There may be an enforcement ‘gap’ if the defendants can rely on the pass on defence to defeat the claim of the direct purchaser yet no indirect claim is brought at all or if a claim is brought, but the claimant cannot establish causation or properly quantify the damage.
 
Question 4
There have been numerous follow-on actions which have been brought relying on Commission Decisions or CMA/OFT decisions. Examples include Genzyme, Replica Kits, Hasbro, Copper Tubes, Gas Insulated Switch Gear (National Grid), Mastercard Interchange, LCDs, Air Cargo (Emerald v British Airways) and Power Cables. Stand-alone actions are legally possible and are increasingly being used – a recent example is the Visa Interchange proceedings where there is no decision from a domestic or European competition authority. There are also a number of actions which are hybrid in nature, in that they will rely on the decision for some aspects of the claim but other aspects extend beyond the scope of the decision in terms of duration, geographic scope, accused participants and therefore they have a stand-alone feature to them as well.
 
Question 5
It is certainly the case that the risk of an adverse costs order in the UK (where litigation is comparatively more expensive than in other Member States) has deterred claimants from bringing claims in the past. That is despite the fact that innovative and flexible cost arrangements have been used. For example, the unsuccessful Arkin Borchard litigation was brought on CFA arrangements, resulting in the lawyers recovering no fees whatsoever. In the JJB damages action following on from the Replica Kits decision, Which estimated that it had invested 25% of its legal budget in fees and had consumed a vast amount of its administrative resources in the case which generated an average award of 25 pence per opt-in claimant. The legal costs involved far outstripped the actual amount of damages recovered.
The advent of funding arrangements to manage the litigation risk has reduced the deterrent factor of legal costs to a considerable degree. Other mechanisms that are being used are for the parties to agree pragmatic approaches to case management and disclosure, for example by agreeing to common issues up front using phased or split trials and preliminary issues to focus on key issues, avoiding the need for expensive applications and by agreeing to limit the scope of disclosure that is provided under the UK regime. Ultimately, costs are a matter of discretion for the trial judge, who will endeavour to keep costs to reasonable limits and use case management powers to manage the cases in a cost-effective and proportionate manner.
 
Question 6
The advent of funding for competition litigation claims in the last seven years has been a momentous development in the UK which has significantly increased access to justice in this area. The most common forms of funding are conditional fee arrangements and, more recently but to a much more limited extent, damage based agreements. The UK cost regime has recently undergone an overhaul in the form of the Jackson Reforms. Prior to that, lawyers could recover a success fee under conditional fee arrangements of up to 100% of their legal costs. Further, unsuccessful defendants would also have to pay the up-front insurance premium for ATE Insurance, which could be quite significant. Those incentives have now been removed by the Jackson Reforms, and that has affected claims being brought by smaller claimants to a degree. However, law firms are now being more proactive to reach out to smaller claimants and are making use of innovative funding arrangements (including crowd funding) to enable the claims to be developed (see also the reply to Question 31 below).
 
Question 7
There is still a degree of lack of information and inertia for consumers and SMEs about competition law generally so, although the CMA and other central regulators do publish their decisions on their websites and there is a significant amount of press attention, most consumers and SMEs are not aware of the fact that they are entitled to redress. This should change with the recent funding initiatives and also the recent Consumer Rights Act 2015. It is increasingly becoming common practice for larger law firms to approach smaller claimants and SMEs to inform them of their rights and to persuade them to opt in to collective actions. Further, as a result of the new procedures introduced by the Consumer Rights Act 2015, there will now be opt out representative actions, which can be brought by class representatives (see also the reply to Question 28 below). Recognised consumer bodies will be able to bring actions on behalf of all consumers in the UK that have purchased the particular product. There is also an active competition law pro bono scheme in the UK whereby smaller consumer and claimants can get access to initial advice from a law firm or barrister as to their rights and the options that they have for bringing proceedings.
As regard limitation, there is a statutory six year period which applies in the England, Wales and Northern Ireland (5 years in Scotland) from the date when the right of action accrued. Generally, the right to damages will accrue when the harm was caused. However, the limitation period may be extended under section 32(1)(b) of the Limitation Act 1980 where the relevant facts of the cause of action were concealed by the Defendant[1]. In such circumstances, time will not start to run until the claimant became aware or ought reasonably to have been aware of the infringement and the fact that it was causing harm to him. That extension will apply to secret cartel cases where the victim was necessarily kept in the dark. It does not apply necessarily in situations where there is an abuse of dominance or a restrictive agreement that the claimant may have negotiated and entered into, with full knowledge of the restrictions and their effect: see the recent Visa Interchange summary judgment ruling in October 2014 and subsequent ruling by the Court of Appeal in August 2015.
Article 10(2) of the Damages Directive can be expected to have a material impact on limitation in the UK because of its general application to all practices regardless of concealment. In theory, Article 10, in combination with provisions suspending the limitation period during investigations and appeals, will mean that limitation could potentially extend to ten years or more in respect of a secret cartel. It is not clear how Article 10(2) will apply in cases involving ordinary restrictive agreements or abuse of dominance. In particular, there is uncertainty regarding the concepts of knowledge and infringement (in particular how Article 101(3) and objective justification interact with the issue of prima facie infringement). These legal uncertainties are expected to create a lot of litigation in the UK as limitation has been a hotly disputed topic – see the recent Visa Interchange litigation where over 37 years’ worth of claims were struck out by summary judgment on the basis that there was enough information in the public domain for the claimants to have reasonable knowledge of the allegedly unlawful behaviour and its impact on interchange rates.
The UK Government plans to implement statutory changes to the trigger point for the start of the limitation and its suspension through primary legislation but regards limitation as a substantive issue that will not apply retrospectively, in accordance with Article 22 of the Directive. Accordingly, the new limitation requirements will not apply in the UK before the proposed implementation date of 1 October 2016.
 
Question 8
Competition damages claims can be brought in the High Court or the CAT. The High Court is split into (i) Chancery Division, which is comprised of specialist competition law judges and (ii) the Commercial Court, which is presided by commercial judges with no specialist competition law experience. Parties are very keen to exercise their choice between these two divisions as they both have advantages and disadvantages. Some parties may prefer a pragmatic commercial approach with robust case management which will enable the dispute to be heard quickly by an interventionist and proactive judge. Other parties may prefer to go to the Chancery Division, where the judges are well versed in competition law and able to deal with complex issues of dominance, economic assessment and market definition, but may also adopt a more European approach. They may be more inclined to seek an opinion from the European Commission or to follow ECJ jurisprudence or even to make a preliminary reference, which may delay proceedings.
It is expected that the CAT will become a major forum for competition damages claims following the recent reforms of the Consumer Rights Act 2015. This gives the CAT its own jurisdiction for both follow-on and stand-alone damages claims as well as injunctive relief. It will also preside over collective actions – both opt-in and opt-out – at various levels of the supply chain. It will also be able to provide fast track injunctive relief for SMEs. The CAT is presided by Mr Justice Roth, a pre-eminent competition law specialist, as well as a number of other Chairmen who all have competition law experience and may also sit in the Chancery Division.
In general, the English legal system does ensure effective administration of justice, albeit in a Rolls Royce fashion. Cases are dealt with promptly and robustly with proactive case management by the courts and normally are concluded in under three years. There are active rules requiring the court and the parties to comply with the ‘overriding objective’ of ensuring that cases are managed effectively in a cost-effective and proportionate manner. Parties are required to consider the use of ADR before they commence a claim and have to provide a summary of their case in advance of issuing proceedings. The judges may also order the parties to stay the proceedings for several months in order to pursue mediation or other ADR as an alternative to litigation (see also the reply to Question 59 below). There are regular case management conferences and the case may be designated to one particular judge from start to finish. Judges intervene and suggest proactive and pragmatic solutions to drive cases forward. Parties are given strict deadlines for service of disclosure, witness statements and expert replies; timetables are set out years in advance of the main trial and the judges make ready use of techniques such as preliminary issues, split trials and summary judgment to syphon off discrete parts of the claim.
Where the system lets itself down is that some rules of procedure are rather antiquated which results in inefficiencies and higher costs. An example of this is disclosure whereby parties have to provide every single piece of information that may be potentially relevant to their case or to the other side’s arguments. However the courts are becoming more pragmatic and are requiring the parties to limit disclosure and keep it to proportionate constraints, thereby reducing the overall costs of the litigation. Other inefficiencies may arise due to limited availability of counsel or the court itself which may result in delays to the overall case timetable.
 
Question 9
The UK judges are pre-eminent specialists in their field who are fully competent to deal with competition law damages, and several of them have been recognised leading practitioners and/or authors of leading textbooks on the matter. Many Commercial Court judges are experienced in quantification of loss and robust case management. Judges may not be familiar with the use of empirical expert evidence and economic concepts, and this can cause delay and difficulties.
 
Question 10
The average duration of damages actions in the UK is, on average, under three years from start to finish, which is much quicker than other Member States. Trials tend to be split into liability hearing (lasting 6-12 weeks) before a separate quantum hearing (3-6 weeks).This may be longer than other Member States, which tend to deal with cases on a much more summary basis without the same extent of documentary evidence and/or oral witness evidence.
It may be that the overall length of proceedings can be reduced by having resort to more pragmatic approaches to disclosure, limiting the use and extent of witness evidence and cross-examination and forcing the parties to use single or joint experts.
In terms of injunctive relief, the CAT now has power to award injunctions to SMEs on a fast track basis with a hearing of less than three days and a judgment within six months, although in an urgent case it will be much quicker than that.
 

II. Questions on Liability for Damages: Parties, Quantification, Passing-on Defence, Causality, Culpability, Joint and Several Liability
 

Question 11
Any natural or legal person who has suffered harmed caused by an infringement of competition law, including direct and indirect purchasers, may recover damages to fully compensate them for their loss. The qualification to this is that a co-infringer can only recover damages if he/she is found to have been in a markedly weaker position than the other party to the infringement (Crehan v Inntrepreneur Pub Co CMC [2004] EWCA Civ 637). The position in English law will not need to be changed to accommodate Article 3(1) and 12(1) of Directive 2014/104/EU.
 
Question 12
Entities which have knowledge of, and participate in, anti-competitive conduct will be considered to be infringers of competition law for the purposes of a damages claim. Parent companies may be held liable for the infringement of competition law committed by a subsidiary where the Commission has found the parent to be liable but it is not clear whether the concept of parental liability, as developed by the Commission in the public enforcement sphere, will be automatically extended to private enforcement – this issue is live in many proceedings.
It remains unclear under English law whether a subsidiary company which implemented an anti-competitive agreement on the instructions of another entity which was aware of the anti-competitive agreement within the same undertaking (the term ‘undertaking’ have the specific meaning attributed to it under EU law) will be liable to pay damages for the effects of implementing that anti-competitive agreement (see Cooper Tire & Rubber Company v Shell Chemicals [2010] EWCA Civ 864).
 
Question 13
Damages claims for infringement of competition law in England and Wales are considered to be a species of tort claim (see Garden Cottage Foods Ltd v Milk Marketing Board [1984] AC 130). As such the damages awarded by the court are intended to place the claimant in the position it would have been had the infringing conduct not occurred. Thus the Claimant may recover damages for any loss that would not have occurred ‘but for’ the conduct of the infringing party, including losses such as loss of profits and loss of the value of the business (2 Travel Group Plc (in liquidation) v Cardiff City Transport Services [2012] CAT 19).
Damages caused by the passing of time can be addressed by the award of interest. Punitive damages, known as exemplary damages in the law of England and Wales, can be awarded unless the infringing party has already been fined by a competition authority (2 Travel Group Plc (in liquidation) v Cardiff City Transport Services [2012] CAT 19). Article 3(2) of Directive 2014/104/EU will not affect current practice. Article 3(3) of Directive 2014/104/EU may further restrict the award of exemplary damages.
 
Question 14
A claimant have to prove that the infringing conduct was the predominant cause of its loss on the balance of probabilities (Arkin v Borchard Lines [2003 EWHC 687). In principle there is no difference in the burden or standard of proof imposed on claimants in competition law claims compared to that imposed on claimants in any other tort claim.
 
Question 15
Comparator based methods with regression analysis are the methods most frequently used to quantify damages. The Practice Guide is not often consulted in practice and the precise method chosen in a particular case is usually driven by the expert economists instructed by the parties to the litigation. Nevertheless the national court are keen to ensure that the costs associated with quantifying damages are proportionate in the context of the case and will take into account the principle of proportionality when determining what method of quantification it will permit in a particular case.
 
Question 16
The general principle is that the claimant has to prove the precise loss that it claims. However estimates may be used where there is an absence of evidence to prove the loss due to the secret nature of the cartel. The national court also has wide case management powers and may order the parties to rely on estimates where it considers that the principle of proportionately requires it and it is fair on the facts of the case.
 
Question 17
Articles 17(1) and 17(2) of Directive 2014/104/EU are unlikely to make any material change to the existing practice in damages actions save that it may make the national court more prepared to rely on estimates than it has previously done.
 
Question 18
There is currently no case law in England and Wales on the availability and/or principles governing the application of the passing-on defence although clarity should be provided by the forthcoming MasterCard and Visa Phase II litigation, due to be heard in 2017. The burden of proving the existence of the defence rests on the Defendant. Article 13 of Directive 2014/104/EU will provide helpful guidance as the law develops in this area.
 
Question 19
There is currently no ‘soft law’ or legislation on the issue of passing-on or the assessment of the rate of passing on. Experts, who are chosen by the parties to the litigation, will provide opinions to the national court about the rate of pass-on in a particular case, derived from extensive factual evidence, often from the claimants’ management accounts. The national courts will assess the validity of these experts’ opinions following the provision of written opinions, and oral evidence (including cross-examination), by the experts. Expert witness evidence is admissible unless there is a specific reason why it should be excluded, such as there is evidence that the witness is biased.
 
Question 20
There is no legislation specifically concerned with damages claims by indirect purchasers/consumers. However, the procedural rules in one of the national courts which deals with damages claims have recently been changed to allow for parties to bring collective proceedings and reach collective settlements which may assist wide groups of indirect purchasers or consumers (see The Competition Appeal Tribunal Rules 2015). It is not yet clear how class certification will be determined as regards commonality between different levels of indirect purchasers. Case law appears to accept in principle that indirect purchasers or consumers may claim damages where they can establish an upstream pass-on of the overcharge. Thus the burden of proof is on the indirect purchasers/consumers to prove the extent of the upstream pass-on on the balance of probabilities. Article 14(2) of Directive 2014/104/EU is likely to alter this current approach to the burden and standard of proof.
 
Question 21
There are no specific procedural mechanisms designed to avoid overcompensation. However the national courts are alert to the issue that the infringer should not be liable for more than the damage caused at that level of the supply chain. They are therefore likely to have regard to other proceedings from different types of purchasers against the same infringers and take this into account in practice in managing the cases before it in accordance with their wide powers of case management under the Civil Procedure Rules. It may be that some proceedings are stayed behind a lead case or that common issues in different sets of proceedings before the same court are heard at the same time.
 
Question 22
The national court is able to take into account previous judgements resulting from actions for damages and information in the public domain resulting from the public enforcement of competition law. The national court can also address the issue of multiples separate claims for damage arising out of the same infringement of competition law by joining the proceedings or engaging in parallel case management of the various sets of proceedings pursuant to their powers under the Civil Procedure Rules to ensure inconsistency between the judgements, and thereby overcompensation, does not arise.
 
Question 23
The basic test for causation in the law of England and Wales is the ‘but for’ test, namely would the damage of which the claimant complains have occurred but for the wrongdoing of the defendant (2 Travel Group Plc (in liquidation) v Cardiff City Transport Services [2012] CAT 19). The chain of causation is only broken if, applying a ‘common-sense approach’, the claimant’s own conduct displaces that of the defendant in generating the loss (Arkin v Borchard Lines [2003 EWHC 687). The concept of causation is the same in competition law damages claims as in other tort law claims. Although this has not yet arisen for determination in English case law, it would be expected that the other concepts of causation and quantification of loss that exist in English tort law, such as foreseeability, mitigation and remoteness, would also apply to competition damages claims. It is not anticipated that there will be any difficulties in view of the EU principle of effectiveness.
 
Question 24
The question of umbrella damages has not yet been determined by the national courts but there does not appear to be anything in the existing national rules which would need to be changed to allow umbrella damages to be successfully claimed. A claim for umbrella damages has been raised in the case of Emerald Supplies and others v British Airways Plc and therefore the national court is likely determine the issue in the near future. The Kone finding is unlikely to affect the causality rules applied in relation to indirect customers.
 
Question 25
National law requires proof that the defendant breached competition law before damages can be claimed. The necessary breach of competition law is often established by a decision of the EU Commission or the national competition authority. There is no additional requirement for ‘culpability’ or ‘fault’ to be established before damages can be recovered for breach of competition law.
 
Question 26
Under English law co-infringers are jointly and severally liable for the compensation for harm resulting from the infringement. There are presently no exceptions to the application of these rules. English law currently does not have the exceptions to joint and several liability that are set out in Articles 11(2)-(4) of Directive 2014/104/EU. As such Articles 11(2)-(4) of Directive 2014/104/EU will result in a change in English law.
 
Question 27
A co-infringer may claim a contribution from the other co-infringer for the damages that it had to pay pursuant to the Civil Liability (Contribution) Act 1978. The judge will then determine contribution on the basis of fairness, taking account of all relevant circumstances. As yet, there are no rulings on the precise factors taken into account although this issue is live in a number of pending cases. There are no exceptions from the normal application of these rules. The restrictions on the liability of defendants who were granted immunity from fines, as set out in Article 11(5) and (6) of Directive 2014/104/EU, are not currently provided for under English law. Thus Article 11(5) and (6) of Directive 2014/104/EU will require a change to English law.
 

III. Questions on Collective Redress

 
Question 28
Yes, there are mechanisms for collective redress available in the UK. Collective actions can either be taken before the CAT under Section 47B of CA98 or the High Court under the CPR. The main mechanisms for collective redress are summarised below.
First, collective actions can be taken in the CAT both to obtain damages and injunctive relief. Previous to 1 October 2015, Section 47B of CA98 enabled collective proceedings to be taken but these were limited to follow-on cases taken on an opt-in basis by a pre-authorised representative party. The Specified Body (Consumer Claims) Order 2005 named the Consumers’ Association (now known as Which?) for the purposes of Section 47B.
The Consumer Rights Act 2015 sought inter alia to facilitate collective actions in the CAT (the ‘2015 Reforms’). From 1 October 2015 on, both opt-in or opt-out proceedings may be taken in follow-on cases and in standalone cases. In the case of opt-out proceedings, class members domiciled in the UK are automatically included in the class, unless they opt-out (non-domiciled class members need to opt-in). In addition, under the Competition Appeal Tribunal’s Rules 2015 (the ‘2015 Rules’) a broad range of persons will, in principle, be able to act as a representative party in a collective action.
Under Section 47B of CA98 (as amended by the Consumer Rights Act 2015), the CAT needs to give permission for the action to proceed under a collective proceedings order (‘CPO’). The CAT’s gatekeeper role in this regard involves two aspects:
(a)        authorisation of the class representative (Rule 78). This is discussed in the response to Question 30 below; and
(b)       certification of the claims as eligible for inclusion in collective proceedings (Rule 79). A CPO cannot be granted unless the CAT is satisfied that the proceedings are eligible proceedings. The proceedings must be: (i) brought on behalf of an identifiable class of person; (ii) raise common issues which are defined by Rule 73(2) as ‘the same, similar or related issues of fact or law’; and (iii) be a suitable claim which involves consideration of various factors set out in Rule 79(1)(a)-(c). The Tribunal will determine the question of whether to authorise the claim on an opt-in or opt-out basis (Rule 79(3)).
Rule 119 of the 2015 Rules is a transitional limitation rule which appears to prevent collective actions for standalone claims where the conduct occurred before 1 October 2015. As yet, there is no authority on how Rule 119 will work in practice. However, on its face, Rule 119 seems to seriously delay many of the benefits of the 2015 Reforms.
A second mechanism for collective actions is available under CPR 19.6. This provision enables a collective action to be taken where the members of the class have ‘the same interest’ in the claim in question. This condition has been interpreted strictly. An action against British Airways arising out of the Air Cargo cartel was not allowed to proceed as a representative action because the claimants, including direct and indirect purchasers, did not have the ‘same interest’ (Emerald Supplies Ltd and another v British Airways Plc [2010] EWCA Civ 1284).
Third, under CPR 19.11, a number of claims which give rise to common or related issues (of fact or law) may be managed collectively under a Group Litigation Order (‘GLO’). Any party to a claim may apply to the court for a GLO to be made. A single court will be assigned to manage the GLO.
 
Question 29
In general, collective antitrust actions were not successful prior to the 2015 Reforms.
For example, only one action was taken under Section 47B of CA98 prior to the 2015 Reforms. This was a follow-on action based on the OFT’s decision that undertakings had unlawfully fixed the price of replica football kit. The collective action was taken by Which? on behalf of 130 consumers who had been overcharged for the purchase of replica football shirts (Consumer Association v JJB Sports Plc). This case resulted in a low settlement and the legal costs were far higher than the damages recovered (see response to Question 5 above).
The 2015 Reforms should help to facilitate collective actions in the UK. The fact that a wide range of persons may now act as the representative party should help to stimulate collective actions. In addition, as noted, collective actions can now be taken on an opt-in or opt-out basis, and relate to follow-on and standalone cases.
 
Question 30
Under the 2015 Reforms, in the case of representative actions before the CAT, the proposed representative party must be authorised as such by the CAT. The representative party need not have a cause of action against a defendant but the CAT must consider that it is ‘just and reasonable’ for that party to act as class representative (Section 47B of CA98).
In determining whether it would be just and reasonable for a person to act as a class representative, the CAT will consider various factors including: (i) whether the proposed representative would fairly and adequately act in the interests of the members (see, in particular, Rule 78(3)); (ii) whether the proposed class representative has a material interest that is in conflict with the interests of the class members, so far as concerns the common issues to be decided in the collective proceedings; (iii) if there is more than one applicant seeking approval to act as the class representative, who would be the most suitable representative; and (iv) the proposed representative’s financial resources, including ability to pay the other side’s costs and ability to fund its own costs (Rule 78(2)).
Broadly speaking, principles 4 to 6 of Recommendation 2013/396/EU are reflected in the 2015 Rules, except that there is no requirement that the representative entity has a non-profit making character (principle 4(a)) or that there be a direct relationship between the main objectives of the representative entity and the rights granted under Union law that are claimed to be violated (principle 4(b)).
Under the 2015 Reforms, it is intended that a wide range of entities can bring representative claims, including, in principle, law firms, third party funders, trade associations, consumer bodies and special purpose vehicles (2015 Guide, paragraph 6.30). There is no blanket prohibition on any organisation, including public authorities, taking on the role of class representative.
 
Question 31
The claimant party is not required to declare to the court the origin of the funds. However, in considering whether it is just and reasonable for a proposed class representative to act in that capacity, one of the factors that the CAT will examine is whether the proposed class representative would be able to pay the defendant’s recoverable costs if ordered to do so (Rule 78(2)(d)). In considering this aspect, the CAT will have regard to the proposed class representative’s financial resources, including any relevant fee arrangements with its lawyers, third party funders or insurers (2015 Guide, paragraph 6.33).
With respect to principle 15 of Recommendation 2013/396/EU, third party funding is allowed. Third party funders may also be permitted to act as class representatives. However, a potential conflict of interest between the third party funder and the interests of a class member may mean that the third party funder is unsuitable to act as class representative (2015 Guide, paragraph 6.30). In addition, with respect to the powers of stay envisaged by principle 15, the CAT has a broad power to stay the action at any time, in light of all the relevant circumstances (Rule 85). In particular, the CAT may stay the action if the class representative no longer meets the Rule 78 criteria for authorisation, which include the ability to pay the defendant’s costs if so ordered (see principle 15(c) of Recommendation 2013/396/EU).
Principle 16 of Recommendation 2013/396/EU is not addressed by the CAT Rules. For instance, third party funders can act as representative parties.
In addition, principle 32 of Recommendation 2013/396/EU is not ensured. Conditional fee agreements are permitted (see Section 58 of Part 2 of the Court and Legal Services Act 1990), including in cases of third party funding without the funding arrangement being regulated by a public authority. Damages-based agreements are prohibited where a CPO is made on an opt-out basis (Section 47C(8) of CA98). However, they are available for opt-in proceedings.
 
Question 32
The general rule is that the unsuccessful party will be ordered to pay the costs of the successful party (see, e.g., CPR 44.2(2)). This ‘costs follow the event’ principle also applies to collective redress actions. However, the court has the power to make a different order and has very considerable flexibility in that regard (see, e.g., CAT Rules, Rule 104(2)). The main thrust of the court’s jurisdiction in respect of costs is to ensure responsible litigation practice and that also applies with respect to collective actions.
 
Question 33
In assessing whether a proposed class representative is appropriate, the CAT will look to various factors including whether that proposed class representative has prepared a plan for the collective proceedings. The way in which the proposed class representative intends to publicise the proceedings to the class members (including through a sample notice) is one of the points which would appropriately be included in that plan (2015 Guide, paragraph 6.30).
The 2015 Guide also notes the importance of publicising the existence of the Claim on the CAT’s website (paragraphs 6.23-6.24).
 
Question 34
With respect to (a) and (b), proceedings at the CAT can be taken either on an opt-in or opt-out basis. The CAT will consider whether proceedings should be on an opt-in or opt-out basis. It will consider all factors it thinks fit, including the strength of the claim and whether it is practicable for the proceedings to be brought as opt-in proceedings having regard to all the circumstances, including the estimated amount of damages that class members may recover (Rule 79(3)). With respect to the assessment of the strength of the claim, the CAT’s Guide notes that this does not require a full merits assessment and the CAT will form a ‘high level view’ of the strength of the claims based on the collective proceedings claim form.
The 2015 Guide states that there is a general preference for proceedings to be brought on an opt-in basis where practicable (paragraph 6.39).
With respect to (c) and (d), in opt-in proceedings, the CPO will specify the time by which a class member may opt-in. After that date, the class is closed (Guide, paragraph 6.50). Where a class member fails to opt in within the specified time, he has to apply to the CAT for permission to opt in (Rule 82(3)).
In opt-out proceedings, the CPO will specify a ‘domicile date’, which is the date for determining whether a person is domiciled in the UK (Guide, paragraph 6.51). Class members domiciled in the UK on the domicile date are automatically included in the class unless they opt out by the date specified in the CPO (class members not domiciled in the UK need to opt in by the specified date in order to be included). Where a class member has failed to opt out within a specific time, he has to apply to the CAT for permission to opt out of the proceedings (Rule 82(3)).
Section 47B(13) of CA98 provides that the right to make a claim in collective proceedings does not affect the right to bring any other proceedings in respect of the claim.
 
Question 35
There is no indication that the system of lawyers’ remuneration creates incentives which are unnecessary from the point of view of the interests of the parties.
Contingency fees are permitted. These fees are regulated (see Section 58 of the CLSA and the Conditional Fees Agreement Order 2013). The success fee is capped at a maximum of 100% of the lawyer’s fee. Damages based agreements are not permitted for opt-out proceedings (Section 47C(8), CA98) (see response to Question 31 above).
 
Question 36
The CAT may not award exemplary (punitive) damages in collective proceedings (Section 47C(1), CA 1998).
Pre-trial disclosure takes place under clearly established principles (relevance and proportionality). Those principles, and the jurisdiction of the court to assess the appropriateness of disclosure, help to ensure that abuse is avoided.
There is no provision for jury awards.
 
Question 37
For the general status of indirect purchasers, see responses to Questions 11 and 20 above. With respect to collective actions under the 2015 Reforms, there is every possibility for them to be able to taken actions before the CAT.
The Court of Appeal has previously ruled that, for an action under CPR 19.6, direct and indirect purchasers did not have the ‘same interest’ so could not form part of the same representative claim (Emerald Supplies Ltd and another v British Airways Plc [2010] EWCA Civ 1284; see response to Question 28 above). Collective actions before the cost need to involve ‘common’ issues which is defined more broadly to include ‘the same, similar or related issues of law or fact’ (Rule 73(2)). It is yet unclear how this will be interpreted in practice.
 
Question 38
Yes, collective follow-on actions can be taken under Section 47B of the CA98 and they meet principles 33 and 34 of Recommendation 2013/396/EU.
 

IV. General Questions on the Relationship and Cooperation between Courts and Competition Authorities and Binding Effect

 
Question 39
The courts in the UK have frequently made requests to the European Commission for an opinion under Article 15 of Regulation 1/2003. Examples include the National Grid and AstraZeneca opinions regarding disclosure of leniency materials and responses to the Statement of Objections. Opinions were also provided in the Mastercard Interchange litigation regarding the position of third parties in confidentiality rings.
There have also been several examples where the OFT and sectoral regulators have intervened of their own initiative before the national courts, as well as in the ECJ. Examples include the intervention by the Office for Rail Regulation in the E.ON litigation regarding the interpretation that should be given to its findings that EWS had abused its dominant position by insisting on long term exclusivity arrangements. The Civil Aviation Authority intervened in 2014 in a public procurement dispute between Gatwick Airport and NATS whereby NATS sought disclosure of the tender price offered by the new entrant to the market. The CAA intervened in order to provide suggestions to the judge as to the terms of the confidentiality ring to be imposed to protect such commercially sensitive information. The OFT also intervened in the Mastercard appeals before the ECJ on its own initiative.
 
Question 40
There have been several preliminary references to the CJEU in competition damages claims, most notably Courage. There have also been other cases where the parties have raised the prospect of a preliminary reference which has not been acceded to by the national court. Examples include a request by the appellants in the Visa Interchange litigation before the Court of Appeal in July 2015, which was refused as the Court of Appeal did not consider that it was necessary to refer questions on limitation and the principle of effectiveness.
 
Question 41
The cooperation between national courts and NCAs and the European Commission, as envisaged in Regulation 1/2003, is working well and is effective in the majority of cases. There have been frustrations expressed by UK judges regarding applications for disclosure of confidential versions of the decisions or documents from the Commission’s case file. This came to a head in the Air Cargo litigation, where the Commission refused to provide a semi-confidential version of the infringement decision and anticipated that it would not be able to do so until 2020. That response was heavily criticised by the first instance judge, who then ordered disclosure of the decision on the basis that the Commission was not cooperating with the national court and therefore he did not have to comply with his obligations of sincere co-operation. That type of stand-off is mercifully rare.
There are a few lacunas in terms of co-operation, mostly as there are no formal requirements for co-operation between national courts within different Member States under the Cooperation Notice. The Brussels I Regulation is not really adequate to deal with situations, especially those envisaged under the new Damages Directive, where there may be multiple proceedings brought in different jurisdictions in respect of the same anti-competitive behaviour or where there are different claims brought at different levels of the supply chain. It would be hard to see how the national courts can be expected to have regard to the multiplicity of such claims when they may not be aware of them and there is no formal mechanism for cooperation with judges in other Member States. There is no formal provision for NCAs from other Member States to intervene in the UK although, as a matter of practical reality, they are unlikely to be refused, should they apply to intervene.
 
Question 42
It is pretty settled that the operative part of the infringement decision together with any facts that are necessary to understand the operative parts are the only parts of the decision that are binding on the national judge in follow-on litigation (the General Court’s recent judgments in Air Cargo are of relevance in this regard). That applies to a decision of the European Commission, the CMA or any of the sectoral regulators in the UK. It does not appeal to decisions of other NCAs in other Member States although in reality, a judge is likely to have regard to such decisions and will give them a certain weight. It is pretty clear that the factual findings of the Commission which are not linked to the operative part are not necessarily binding. The same applies to the Commission’s economic analysis. It will be open for a party to put arguments to the judge as to the correctness of the economic analysis and the weight that should be given to it and to present expert economic opinion as appropriate to contest the findings made by the competition authority. Article 19 of Directive 2014/104 reflects the position that was prevailing in the UK legal system by virtue of the Competition Act 1998 so there are no further amendments that are required.
 
Question 43
It has now been determined by the Deutsche Bahn/Morgan Crucible litigation in the UK that a decision will be final as against an addressee once the appeal period has expired or once any appeal has been determined. If the appeal is merely confined to disputing the level of the fine and is not an appeal on the substance, it will not affect it being a final decision.
 
Question 44
National courts are not obliged to stay proceedings once an NCA or even the European Commission has initiated proceedings on the same matter. It is a matter of discretion for the trial judge. It is increasingly common for national judges in the UK to order the parties to progress the case management as far as they can in the interim whilst the investigation is being concluded. The fact that an investigation is ongoing will not prevent the parties from completing the first case management conference to determine the timetable for the proceedings, nor will it prevent them from progressing disclosure on the key issues. In past cases, judges have refrained from issuing any ruling that might come into conflict with the eventual decision from the Commission or the NCA, but will progress the case to get it ready for trial as soon as any decision is issued so that the case can be resolved as quickly as possible thereafter.
 

V. Questions on Disclosure and Confidentiality

 
Question 45
There are no specific rules in the Competition Act 1998 for disclosure of documents on the case file held by an NCA. However, there is the ability to seek disclosure under the Civil Procedural Rules of the High Court (CPR Part 31). Applications for disclosure can be made in advance of commencing proceedings or during the proceedings themselves. The new Competition Appeal Tribunal Rules 2015 also provide, in Rule 63, for disclosure against a third party once the proceedings have commenced. The Tribunal’s powers to order such disclosure are limited to a category of documents or very clearly defined documents, and it will have regard to the proportionality of the request, the evidence supporting the necessity of the request and the fact that the respondent to the application is not yet involved in the proceedings. The Tribunal may also award provision for the payment of costs incurred by the non-party in making the disclosure.
 
Question 46
The most common way of obtaining evidence in the UK is for the parties to request such evidence by correspondence either before proceedings have commenced or during the proceedings. Under the Pre Action Protocol, all parties are required to send a detailed letter before action before they commence proceedings setting out the essence of their case and making requests for information or evidence that they need to complete their pleadings. There are also formal rules for pre-action disclosure by making an application to court pursuant to CPR Part 31.
The first port of call is to try to obtain such documents from the parties to the proceedings but, where this is not possible, courts will also entertain applications for disclosure from third parties or the court itself may make a request under Article 15 of Regulation 1/2003. A recent application was made under Article 15 in the Visa Interchange litigation for a request of underlying evidence that had been relied upon by the European Commission in its Final Survey on merchant costs. The request was made in August 2015 and the Commission replied in October 2015, refusing to provide the information even on an aggregated and anonymous basis since its investigation was still ongoing. A similar request for an opinion was made in the Mastercard Interchange litigation in October 2015 whereby the court requested the Commission’s advice on whether it should order disclosure of Mastercard’s information regarding the Final Survey report. The Commission issued a detailed opinion in October 2015 suggesting to the national court that although it could not prevent it from ordering disclosure of such material, it should not do so for confidentiality reasons and in the interests of public enforcement.
 
Question 47
Under English rules of procedure, all parties are under an active duty to disclose any documents that exist and are in their possession or control which are relevant to the matters in issue in the case, subject to proportionality (the courts will balance the need to obtain relevant evidence with avoiding wasteful, excessively costly and oppressive exercises). ‘Relevant’ means that the evidence either supports a party’s case or the case of the other side. That duty is automatic, and there is no need for a specific order from the court for such disclosure.
The parties may supplement that duty with a specific request for disclosure under CPR Part 31 or by way of a request for further information under CPR Part 18. In such a case, the judge will need to be satisfied that the application is reasonable, necessary for the party to understand the case made against it and proportionate. There are also provisions in the CPR and in the CAT Rules that parties are entitled to request disclosure of any specific document that has been mentioned in a pleading (such as a Claim Form, Defence or Reply), a written statement or affidavit or any expert report.[2]
 
Question 48
This question overlaps with Question 45.
There is provision for the national courts to make a request to the European Commission or an NCA for access to documents on its file. The judge will need to be convinced that the request is necessary and proportionate and that it is being used as a means of last resort because the information sought is not publicly available and is not in possession of any of the parties. The judge will also be mindful of the need to preserve confidentiality and to limit the extent of the request to that information that is strictly necessary. It may also impose limits on the use of such information, normally within a confidentiality ring limited to external legal advisers, and solely for the purpose of the proceedings before the court. It may also impose specific conditions regarding the return or destruction of such documents once the proceedings have been settled or determined.
 
Question 49
In the UK, it is customary for the parties to provide standard disclosure which covers all relevant documents. However, the parties may prefer to agree to rely on non-standard disclosure, which may be limited to categories of evidence or some other proportionate limits. For example, the parties may agree to use search terms or limited time periods or named custodians to constrain the amount of evidence provided. The terms of such disclosure will be set out in a Disclosure Protocol which is agreed between the parties and sets out any limits to the search for documents to ensure that it remains reasonable and proportionate. That disclosure report or protocol will then be submitted to the judge at the case management conference so that the High Court or CAT can decide what governing principles should apply to disclosure and the need to limit the extent of disclosure in order to deal with the case justly. However, the ability to limit disclosure to categories of evidence is a process that is largely driven by the parties, and therefore its frequency depends on the parties’ perception of the needs of the individual case.
 
Question 50
The UK Government in its recent consultation has suggested introducing amendments to the Civil Procedure Rules to ensure statutory protection for leniency materials. It will also issue guidelines to national judges to ensure proportionality and confidentiality. Other than that, the current requirements for disclosure in the UK are much wider than that provided in Directive 2014/104/EU, and therefore the introduction of Articles 5 and 4 will not materially affect the approach taken in obtaining documents to substantiate claims. If anything, adoption of the Directive and implementing legislation may actually constrain the amount of disclosure that is being provided as the courts are becoming increasingly critical of the huge costs and resources that are consumed by the disclosure process in UK litigation.
We do not expect that the new provisions in the Directive will reduce the number of requests for access to documents made vis à vis the competition authorities because, even if a party does have a document in its possession that emanates from the case file, it will be reluctant to disclose that document and allow inspection of that document without the Commission’s authority because of the wider public interest considerations. It is also likely that a national judge, when faced with an application for disclosure or inspection, would prefer to seek the Commission’s opinion first before it makes an order.
 
Question 51
On 26 January 2016, the UK Government issued a consultation regarding its implementation proposals which it expects to finalise in early Summer 2016[3].  There is no draft legislation as yet. Its key recommendation is to implement the Directive as a single regime, which will apply the same rules to claims involving domestic competition law as well as EU competition law. It also wishes to bring the implementation forward to 1 October 2016.  That proposal goes further than the scope of the Directive but will produce legal certainty for parties and the courts and reduce costs. It proposes to implement the Directive through a combination of primary and secondary legislation.  Key substantive changes such as the start and suspension of limitation periods, joint and several liability and the passing on defence will be transposed via amendments to the Competition Act 1998. Other changes (such as disclosure, the power to estimate damages, will be implemented via “soft law”, including changes to the Civil Procedure Rules, CAT Rules and in the form of guidance to judges.
 
Question 52

The UK has had a very extensive disclosure regime for a number of years which is considerably wider than that envisaged by the Directive. That disclosure regime applies generally to all types of claims, not just competition law damages claims.

Question 53
Section 237 of the Enterprise Act 2002 applies a general restriction on the disclosure of commercially sensitive information that is defined as ‘commercial information whose disclosure might significantly harm the legitimate business interests of the undertaking to which it relates or information relating to the private affairs of an individual whose disclosure might significantly harm the individual’s interests’. (Section 244(3)). That definition is used in public enforcement cases to prevent the NCAs from disclosing such information without consent unless there is a permitted statutory gateway. In practice, the courts and parties tend to use the same definition in private enforcement cases.

Question 54
The courts in the UK are fairly comfortable with ordering sophisticated confidentiality rings which can be applied in multiple formats. The confidentiality rings will set out the definition of the confidential information and will limit its circulation to ‘Permitted Persons’, which are normally constrained to external legal advisers and in-house legal advisers and economists. For the same set of proceedings there may be multiple level confidentiality rings so that different information can be disclosed to the company’s commercial executives in the main ring with highly sensitive information being confined to an inner or super confidentiality ring. Some of the rings have additional restrictions such as Chinese walls, a prohibition on individuals acting on particular boards or management committees or exercising their voting rights if they have had access to commercially sensitive information of their competitors.
All Permitted Persons within the ring have to give an undertaking to the court that they will not disclose the information or use it for any purpose other than the proceedings. They must also comply with the directions given by the court for the destruction or return of the documents after the conclusion of the proceedings. A breach of the undertaking is punishable by contempt of court, potentially attracting a term of imprisonment, although that is rarely, if ever, enforced. The court may also have the right to refer any breach to the Permitted Person’s regulatory body, where disciplinary proceedings could be opened in consequence of the breach.
Within the hearings, the court also has regard to pragmatic measures to ensure the confidentiality of the materials to make sure that they are not read out aloud in court. For instance, the court will ask for all pages in the bundles which contain confidential information to indicate the confidential information through the use of markers or highlighting and also for any entirely confidential documents to be printed on coloured paper so that the court is aware that they should be read and not read out aloud. The court may also order parties that are not Permitted Persons to leave the court room so that it can hear part of the hearing in camera. Similarly, it may make an order at the outset of proceedings that any information that is read out inadvertently in court is not to be recorded or reported in the Press.
Increasingly, as disputes involving multiple parties are becoming more and more common, the courts are being asked to consider further protections about the use of information that has been referred to in court. Normally, as soon as any evidence is referred to in open court, it then becomes public information and it can be used for any purpose thereafter. There are provisions in the CPR, whereby judges can make orders constraining the use of information that has been read out in court to stop it being used in other proceedings elsewhere in other Member States or worldwide. Further, parties are increasingly having to turn their minds to creating flexible and pragmatic mechanisms for protecting confidential information between claimants to the same proceedings which are direct competitors. The CPR provides limits to the use of information that has been disclosed, which is confined to the particular claim that has been brought. However, a defendant facing multiple claims by different parties may well want to rely on the evidence disclosed by Claimant A in its defence against Claimant B. There have therefore been recent applications seeking the disapplication of the protections and limitations in the CPR. At the same time, the court has to consider mechanisms to preserve confidential information being leaked between competitors in open court. These complicated issues are being addressed through the mechanism of multi-layered confidentiality rings.
 
Question 55
See answer to Question 54.
 

VI. Specific Question on the Impact of a Cross-Border Element

 
Question 56
The main issue that has arisen in the national courts regarding the application of Regulation 44/2000/EU has been in relation to anchor defendants. The principle question that still requires resolution by the national court is whether a subsidiary company based in the UK which implemented a cartel as a result following instructions from its parent company but which did not have knowledge of the existence of the cartel can constitute and anchor defendant for the purposes of Brussels I (Cooper Tire & Rubber Company v Shell Chemicals [2010] EWCA Civ 864). However, there do not appear to have been significant problems in the application of the relevant rules such that those rules require alteration.
 
Question 57
The nationality of the claimant, by itself, does not affect the claimant’s ability to bring a claim in the UK. The national provisions concerning collective actions contain no restrictions on bringing of claims on the basis of the nationality of the claimants. Consequently persons from several Member States should be able to bring a single collective action. One potential issue which may arise is where a claim is brought by an entity which has a legal form not recognised by English law but is recognised by the law of another state. In that situation it is not clear that the English court will allow the entity to bring the claim although it arguable that the English court will allow the entity to bring the claim where it has expert evidence to confirm that the entity is a proper legal person under the laws of the other state.
 

VIII. Questions on ADR/Consensual Dispute Resolution

 
Question 58
The commonly used forms of ADR in the UK include commercial negotiation/settlement, arbitration and mediation. It appears that adjudication is rapidly becoming established as a method of settling competition law disputes (primarily because of the confidentiality involved). It is expected that mediation will increase as a means of resolving multiple claims. The precise extent to which the different forms of ADR are used depends on the sector in question.
 
Question 59
In line with principles 25 and 26, alternative dispute resolution is encouraged during the pre-trial stage (in the CPR pre-action protocols) and during the proceedings (see, e.g., CPR 26.4). CPR 1.4(2)(e) and (f) require the court to encourage the parties to use alternative dispute resolution procedures in order to settle their case without litigation. This also applies for collective actions taken under the CPR.
CA98 provides for settlement of collective actions. Section 49B concerns collective settlement where no collective proceedings have started or before a CPO has been made. Section 49A concerns collective settlement after a CPO has been made for opt-out collective proceedings.
Separately, in determining whether claims are suitable to be brought in collective proceedings, the CAT will take into account the availability of alternative dispute resolution (2015 Rules, paragraph 79(2)(g)).
 
Question 60
Most cases have been resolved through settlement. The terms of those settlements tend to be confidential. For example, in June 2014, the claim by National Grid against Alstom, ABB, Siemens and Areva for damages following the European Commission’s gas-insulated switchgear decision, was settled. At a similar time, the damages action taken by Cooper Tire arising from the Commission’s synthetic rubber cartel decision also settled.
 
Question 61
There are no current rules in the UK providing for suspension of the limitation period or other effects as a result of settlement negotiations and Articles 18 and 19 will introduce new law in this respect.  The UK Government intends to make express provision in the Competition Act 1998, but regards them as substantive in nature, so they will not apply retrospectively in accordance with Article 22.
 
Question 62
Section 68 of the Arbitration Act 1996 provides that a party may challenge an award on the grounds of serious irregularity affecting the tribunal, the proceedings or the award. These grounds include that the award was contrary to public policy (Section 68(g)). Case C-126/97 Eco Swiss provides that where domestic law permits an appeal against an arbitration award on the ground of public policy, then an appeal should also be allowed for breach of Article 101 TFEU. There is no clear English authority providing that there are obstacles to the application of Eco Swiss in this jurisdiction.
 
Question 63
This can be done in three ways. First, the relevant rules should provide strong economic incentives for the parties to settle, including by enabling the court to consider, when assessing costs, how a party has conducted itself with respect to settlement. For example, in deciding on the amount of costs, the English courts are to have regard to efforts made both before and during proceedings to settle the case (see CPR 44.4(3)). CPR 36 also provides a strong incentive to settle by imposing cost consequences if a party which refuses a settlement offer fails to obtain a more favourable judgment at trial. Second, the rules should facilitate settlement by requiring the court to encourage the parties to settle (see CPR 1.4(2)(e) and (f)). Third, the rules should facilitate discussions between the parties.
 

IX. Questions on Legislative Perspectives

 
Question 64
Directive 2014/104/EU and Recommendation 2013/396/EU are unlikely to cause significant difficulties in England and Wales. The main challenges will be to accommodate the provisions: (i) restricting liability for immunity recipients and SME’s; (ii) suspending the limitation period whilst consensual dispute resolution is taking place; (iii) dealing with the defence of pass-on to ensure its proper implementation; (iv) addressing the burden of proof on indirect purchasers in relation to upstream pass-on and (v) dealing with multiple claims from different levels of the supply chain and/or in different jurisdictions.  Implementation of the Directive in the UK is also complicated by the fact that the UK introduced far-reaching reforms last year in the Consumer Rights Act 2015, which provide for opt-out collective redress, which add an additional layer of complexity when dealing with multiple claims.
 
Question 65
There are no further legal or practical obstacles that need to be removed to allow damages claims to work in practice.
 
Question 66
It would be sensible for the provisions of Directive 2014/104/EU to apply to damages claims relating purely to breaches of national competition law, as applicable, to create consistency in competition damages claims. Indeed, in its recent consultation, the UK Government has proposed a single regime to apply to both EU and domestic competition law claims from 1 October 2016. However it would not seem appropriate for the provisions of Directive 2014/104/EU to apply to other areas of the law more widely.


[1] There are equivalent provisions in Scottish law.

[2] See Rule 61 of the CAT Rules and CPR 31.19.

[3] https://www.gov.uk/government/consultations/damages-for-breaches-of-competition-law-implementing-the-eu-directive

 
Monckton Chambers
Gray’s Inn
London

 
January 2016
 
Anneli Howard
Anneliese Blackwood
James Bourke


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