Private enforcement of Competition Law invigorated

Private enforcement of Competition Law invigorated

Published:

Author: Angela Gregson

Applies to: UK wide

The Consumer Rights Act 2015 (the CRA 2015), which came into force on 1 October 2015, seeks to open up private enforcement of competition law in England to a wider class of claimants.

England: the jurisdiction of choice

England has proved a popular jurisdiction for the relatively few competition damages actions that have been brought in European Member States. Overwhelmingly, competition damages claimants in England have been large businesses that can afford the upfront costs and risks inherent in bringing a claim.

The English Courts readily assert jurisdiction to hear damages claims against extraterritorial addressees of competition infringement decisions. It is sufficient for claimants to identify a UK-based subsidiary as an 'anchor defendant' on the basis that it implemented the infringement e.g. through sales of its parent company's cartelised products. England also boasts Judges that possess competition law expertise, the scope to recover costs and comparably favourable rules on disclosure and limitation periods.

However, with the high cost of private damages actions presenting a significant barrier to smaller businesses and individual consumer claimants, unsurprisingly large corporate claimants have led the way in English competition damages actions to date.

The impact of the CRA 2015

The CRA 2015 intends to increase the use of the UK's dedicated competition tribunal, the Competition Appeal Tribunal (CAT), for private enforcement in the UK and to facilitate claims being brought by consumers and small and medium sized enterprises (SMEs) by:

  • allowing claims which are not based on an existing competition infringement decision of a relevant regulatory body (including the Competition and Markets Authority (CMA) and the European Commission) (known as "stand-alone" claims) to be brought in the CAT. Prior to 1 October 2015, only claims based on a pre-existing competition infringement decision (known as "follow-on" claims) could be brought in the CAT, with the English High Court holding sole jurisdiction to hear stand-alone claims;
  • extending the limitation period for claims to be brought in the CAT from two years following the expiry of the deadline to appeal the underlying competition infringement decision to six years from the date of the cause of action;
  • allowing the CAT to award injunctive relief in addition to monetary damages and interest (previously, the CAT could only award damages and other monetary sums);
  • introducing a fast-track procedure for SMEs; and
  • introducing opt-out collective actions allowing representatives to bring claims on behalf of all of a certain class of UK domiciled claimants excluding any eligible individual claimants who specifically choose to opt out.

What next?

It is likely there will be an increase in competition damages actions being brought in the CAT as a result of the changes introduced by the CRA 2015. This may lead to an increase in the exposure of businesses who have infringed competition law. It remains to be seen how many of these claims will be brought by representatives of classes of consumers in opt-out collective actions or SMEs.

Disclaimer

This document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.

About the Author

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Angela Gregson

Associate

03700 86 2222

Angela is an Associate within our Dispute Resolution and Compliance team, specialising in EU & competition law. Based in our London office, Angela advises clients on all areas of EU & competition law including day-to-day compliance, regulatory investigations, dawn raids, merger control and state aid.

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