Ireland: Competition Litigation 2017

Last Updated: 26 September 2016
Article by Richard Ryan and Patrick Horan

1 General

1.1 Please identify the scope of claims that may be brought in your jurisdiction for breach of competition law.

The Competition Act 2002 as amended (the "Competition Act") contains two main prohibitions:

  • Prohibition on anti-competitive arrangements between undertakings: section 4(1) of the Competition Act prohibits and renders void all agreements between undertakings, decisions by associations of undertakings and concerted practices which have as their object or effect the prevention, restriction or distortion of competition in trade in any goods or services in the State or in any part of the State, including those which:
    • fix prices;
    • limit or control production or markets;
    • share markets or sources of supply;
    • apply dissimilar conditions to equivalent transactions with other trading parties; and
    • make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which by their nature or according to commercial usage have no connection with the subject of such contracts (e.g. tying).
  • Prohibition on abuse of dominance: Section 5 of the Competition Act prohibits the abuse by one or more undertakings of a dominant position in trade for any goods or services in the State or any part of the State. Such abuse may, in particular, consist in:
    • directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions;
    • limiting production, markets or technical development to the prejudice of consumers;
    • applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage; and
    • making the conclusion of contracts subject to the acceptance by other parties of supplementary obligations which by their nature or according to commercial usage have no connection with the subject of such contracts.

These prohibitions are broadly similar to, and are modelled on, the prohibitions contained in Articles 101 and 102 of the Treaty on the Functioning of the European Union ("TFEU").

As regards civil proceedings, sections 14(1) and 14A(1) of the Competition Act provide that aggrieved persons and the Competition and Consumer Protection Commission (the "CCPC") (or the Commission for Communications Regulation, hereafter "ComReg") respectively have a right of action against:

  • any undertaking which is/was a party to behaviour prohibited by sections 4 or 5 of the Competition Act or Article 101 or 102 TFEU; and
  • any director, manager or other officer of any such undertaking, or any person who purported to act in such capacity, who authorised or consented to such behaviour.

The range of remedies available is set out in Section 14 of the Competition Act and includes:

  • declarations;
  • injunctions;
  • damages, including exemplary damages (for aggrieved persons but not for the CCPC/ComReg);
  • orders requiring a dominant position to be discontinued; and
  • orders requiring the undertaking to adopt such measures for the purpose of it ceasing to be in a dominant position or securing an adjustment of that position including the sale of assets.

As regards criminal proceedings, sections 6 and 7 of the Competition Act make it an offence to breach section 4 or 5 of the Competition Act or Article 101 or 102 TFEU. The CCPC investigates alleged breaches of the Competition Act and can either itself bring a summary prosecution before the District Court or, in more serious cases, refer a case to the Director of Public Prosecutions (the "DPP") for prosecution on indictment. Section 8 of the Competition Act sets out the penalties for those found guilty of offences under sections 6 or 7 of the Competition Act.

The responses below are limited to a consideration of civil aspects of competition litigation.

1.2 What is the legal basis for bringing an action for breach of competition law?

Sections 14 and 14A of the Competition Act.

1.3 Is the legal basis for competition law claims derived from international, national or regional law?

National law: sections 14 and 14A of the Competition Act allow for the bringing of claims for breaches of sections 4 or 5 of the Competition Act and/or breaches of Articles 101 or 102 TFEU.

1.4 Are there specialist courts in your jurisdiction to which competition law cases are assigned?

There is no specialist competition court in Ireland. Civil competition cases are heard before the Circuit Court or the High Court. In general, the Circuit Court has jurisdiction to hear claims having a monetary value not exceeding €75,000. The High Court has original jurisdiction to hear virtually all matters irrespective of amount. However, a statutory instrument, Statutory Instrument 130/2005 The Rules of the Superior Courts (Competition Proceedings) 2005 ("SI 130/2005"), has amended the Rules of the Superior Courts by introducing a High Court Competition List and providing for procedures that apply to the Competition List. As a result, a judge of the High Court is designated to hear competition law cases and there are specific procedural rules which apply to cases entered into the High Court Competition List.

Proceedings that may be entered into the Competition List include:

  1. proceedings in exercise of a right of action conferred by the Competition Act on a person aggrieved in consequence of any behaviour prohibited by sections 4 or 5 of the Competition Act;
  2. proceedings in exercise of a right of action conferred by the Competition Act on the CCPC/ComReg in respect of any behaviour prohibited by sections 4 or 5 of the Competition Act or by Articles 101 or 102 TFEU;
  3. an appeal against the making of a declaration by the CCPC under section 4(3) of the Competition Act (such declarations are similar to European Commission block exemption regulations);
  4. an appeal against any merger control determination of the CCPC under Irish merger control rules to either block a transaction or clear it subject to conditions (other than in the case of media mergers);
  5. proceedings for judicial review of a decision of the CCPC;
  6. proceedings for an injunction to enforce compliance with the terms of a commitment or determination, or of an order made by the Minister for Jobs, Enterprise & Innovation under section 23(4) of the Competition Act (relating to media mergers);
  7. proceedings seeking the application of Articles 101 or 102 TFEU;
  8. proceedings for relief at common law in respect of a condition or covenant in any agreement alleged to be unreasonably in restraint of trade; and
  9. any other proceedings which concern the application of a provision of the Competition Act, of Regulation (EC) 1/2003 or of Articles 101, 102, 106, 107 or 108 TFEU.

The procedural rules for the Competition List are intended to expedite competition proceedings and provide for enhanced case management. Matters covered by those procedural rules include:

  • pre-trial procedures, including directions hearings, motions and applications, interrogatories and case management;
  • the use of pre-trial conferences and questionnaires;
  • court books;
  • the electronic filing and serving of documents;
  • exchange of documents and evidence; and
  • the appointment of experts to assist the court, particularly in relation to economic matters.

Competition issues may also be raised in cases not entered in the Competition List. In Ski Apparel v Revolution Workwear et al. [2013] IEHC 289, para. 61., for instance, which concerned a dispute involving an Irish distributor of Ski Apparel's products (clothing) and in which it was argued that a non-compete was anticompetitive, Laffoy J said "application of competition law, both at European and at national level, is a specialised discipline and, understandably, there is a special Competition Case List in the High Court. Notwithstanding that, competition law issues find their way into cases listed elsewhere in the High Court".

1.5 Who has standing to bring an action for breach of competition law and what are the available mechanisms for multiple claimants? For instance, is there a possibility of collective claims, class actions, actions by representative bodies or any other form of public interest litigation? If collective claims or class actions are permitted, are these permitted on an "optin" or "opt-out" basis?

Section 14(1) of the Competition Act provides that "any person who is aggrieved in consequence of any agreement, decision, concerted practice or abuse which is prohibited under section 4 or 5, or by Article 101 or 102 of the Treaty on the Functioning of the European Union, shall have a right of action under this subsection for relief".

"Aggrieved persons" include natural and legal persons. Section 14A (1) of the Competition Act provide a right of action to the CCPC (or ComReg) in respect of behaviour prohibited by sections 4 or 5 of the Competition Act or by Articles 101 or 102 TFEU. Follow-on actions are facilitated by a provision in the Competition (Amendment) Act 2012 whereby a finding by an Irish court of a breach of sections 4 or 5 of the Competition Act, or Articles 101 or 102 TFEU, will be regarded as res judicata (i.e. already adjudicated and unnecessary to be considered again) in any subsequent civil proceedings. Accordingly, a plaintiff in a follow-on action does not have to prove the infringement of competition law occurred and only has to prove causation, loss and the quantum of damages that they are entitled to if successful.

There is currently no procedure in Ireland for the taking of class actions seeking damages. In practice, parties involved in related actions may agree to one action proceeding as a "pathfinder case" and the other parties (including defendants) may agree to be bound by the outcome of the "pathfinder case". There have been calls for reform to facilitate the taking of collective/related actions in Ireland, including in a report by the Law Reform Commission published in 2005. Recent developments in the UK and at EU level, including the EU Recommendations on Collective Redress of 2013 and Directive 2014/104/EU on Antitrust Damages Actions, may provide further stimulus for reform in this area.

Representative bodies may bring representative actions on behalf of their members seeking injunctive or declaratory relief, but not damages.

1.6 What jurisdictional factors will determine whether a court is entitled to take on a competition law claim?

The jurisdiction of certain types of civil claims involving defendants who are domiciled in an EU Member State (apart from Denmark) is governed by Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and recognition and enforcement of judgments in civil and commercial matters (recast) ("Brussels Regulation") (which replaced the previous version, Regulation (EU) 44/2001, with effect from 10 January 2015). In summary, in such cases, a defendant may be sued before an Irish court if it is domiciled in Ireland. Alternatively, a defendant may be sued in an Irish court if the anticompetitive behaviour, which is the subject of the complaint, is alleged to have occurred there. A defendant may also be sued in an Irish court if the relevant damage occurred, or will occur there.

If these criteria are met then it is likely that the Irish courts will have jurisdiction. In addition, where the parties have agreed that the courts of Ireland are to have jurisdiction to settle any disputes arising in connection with a particular legal relationship, those courts have jurisdiction, unless the agreement is null and void.

Ireland is a party to the Brussels Convention between EU Member States and Denmark and to the Lugano Convention between EU Member States and the members of EFTA, Switzerland, Iceland and Norway. Those Conventions apply similar rules which govern the jurisdiction of certain civil claims involving defendants in those countries.

Where the rules of the Brussels Regulation, the Brussels Convention and the Lugano Convention do not apply, Irish common law jurisdictional rules are applicable. In summary, Irish courts can have jurisdiction under common law rules in the following situations:

  • where the defendant has been duly served in Ireland;
  • where the parties agree to the jurisdiction of the Irish courts;
  • where a defendant submits to the jurisdiction of the Irish courts; or
  • where service outside of Ireland has been performed in accordance with Order 11 of the Rules of the Superior Courts.

Order 11 applies to cases where a defendant is not present in Ireland but the case is so closely connected to Ireland or with Irish law that there is ample justification for it being tried in Ireland. Under Order 11, it is necessary to apply for leave of the High Court before documents can be served outside the jurisdiction. This ensures that service on defendants outside the jurisdiction is limited to cases where the court is of the view that it has jurisdiction to consider the particular dispute. The burden of proof is on the applicant to establish that it is a proper case for service under Order 11.

Civil competition law claims can be brought in Ireland before the Circuit Court or the High Court. In general, the Circuit Court has jurisdiction to hear claims having a monetary value not exceeding €75,000. The High Court has original jurisdiction to hear virtually all matters irrespective of amount. However, if a claim is brought in the High Court and the award falls within the jurisdiction of the Circuit Court (i.e. up to €75,000), the plaintiff may only be awarded costs applicable to an action before the Circuit Court.

1.7 Does your jurisdiction have a reputation for attracting claimants or, on the contrary, defendant applications to seize jurisdiction, and if so, why?

We are not aware of Ireland having a reputation for attracting claimant or defendant applications from other jurisdictions.

1.8 Is the judicial process adversarial or inquisitorial?

Ireland is a common law jurisdiction and has an adversarial judicial process.

2 Interim Remedies

2.1 Are interim remedies available in competition law cases?

The range of remedies available before Irish courts is set out in Sections 14 and 14A of the Competition Act. They include interim measures.

2.2 What interim remedies are available and under what conditions will a court grant them?

The courts may grant interim relief in respect of private antitrust litigation in certain circumstances. Sections 14(1) and 14A(1) of the Competition Act provide for the grant of interim injunctions, interlocutory injunctions and injunctions of definite or indefinite duration. Interim injunctions can be granted for very limited periods of time and may be granted on an ex parte basis while interlocutory injunctions can last until the full hearing of a case. Applicants are required to provide an undertaking to ensure that the defendant will be properly compensated should they lose their case.

The grant of injunctions is at the discretion of the court. An injunction may be granted by the courts where:

  • there is a fair question to be tried;
  • damages would not be an adequate remedy; and
  • the balance of convenience favours the award of the injunction.

The types of interim/interlocutory injunction available in Ireland include:

  • prohibitory injunctions restraining a person from carrying out an act;
  • mandatory injunctions to require a person to carry out an act; And
  • quia timet injunctions, which are granted to prevent an anticipated breach of legal rights.

It is more difficult to secure a mandatory injunction at an interlocutory stage than a prohibitory injunction. In Lingham v Health Service Executive [2005] IESC 89, [2006] 17 E.L.R. 137, which concerned an application for an interlocutory mandatory injunction, the Supreme Court stated that in such a case it is necessary for the applicant to show at least that he has a strong case and that he is likely to succeed at the hearing of the action.

3 Final Remedies

3.1 Please identify the final remedies which may be available and describe in each case the tests which a court will apply in deciding whether to grant such a remedy.

Section 14 of the Competition Act provides for the following possible remedies:

  • declarations;
  • injunctions;
  • damages, including exemplary damages (for aggrieved persons but not for the CCPC/ComReg);
  • orders requiring a dominant position to be discontinued; and
  • orders requiring the undertaking to adopt such measures for the purpose of it ceasing to be in a dominant position or securing an adjustment of that position including the sale of assets.

In addition, section 14B of the Competition Act, which was introduced by the Competition (Amendment) Act 2012, enables the CCPC or ComReg, following an investigation, to apply to the High Court to have commitments entered into by an undertaking made an order of court. A breach of those commitments would then constitute contempt of court by the undertaking. This provides the CCPC and ComReg with the option of bringing an investigation to a close by agreeing not to issue proceedings in consideration of the undertakings involved agreeing to do, or refrain from doing, such things as are specified in the commitments.

3.2 If damages are an available remedy, on what bases can a court determine the amount of the award? Are exemplary damages available? Are there any examples of damages being awarded by the courts in competition cases which are in the public domain? If so, please identify any notable examples and provide details of the amounts awarded.

There are two types of damages available in competition cases:

  • ordinary damages; and
  • exemplary damages.

The general principle underlying the award of ordinary damages is to compensate the injured party for the loss suffered as a result of the breach of competition law in question. As regards the intention of the defendant, in Donovan v ESB [1997] 3 IR 573 (SC), the Supreme Court held that "[the court] is not concerned with the motives or the intention of the party in default unless the question of exemplary damages arises".

The courts are expressly empowered to grant exemplary damages in competition cases under Section 14(5) of the Competition Act.

No specific statutory guidance has yet been provided on how such damages should be assessed. In Conway v INTO [1991] 2 IR 305, the Supreme Court, in the context of a breach of the constitutional right to education, explained that "[t]he object of awarding exemplary damages is to punish the wrongdoer for his outrageous conduct, to deter him and others from any such conduct in the future, and to mark the court's ... detestation and disapproval of that conduct". Therefore, contrary to the situation regarding an award of ordinary damages, the intention of the defendant is relevant when granting exemplary damages. To date, exemplary damages have rarely been awarded by Irish courts and the overall size of awards remains relatively small.

Section 14(4) of the Competition Act provides that, where an action is brought in the Circuit Court, any relief by way of damages, including exemplary damages, shall not, except by consent of the necessary parties in such form as may be provided for by rules of court, be in excess of the limit of the jurisdiction of the Circuit Court in an action founded on tort. This arises because the Circuit Court's maximum jurisdiction in terms of damages to be awarded is €75,000. The jurisdiction of the High Court is unlimited.

We are not aware of any Irish competition cases in the public domain where exemplary damages have been awarded.

3.3 Are fines imposed by competition authorities and/or any redress scheme already offered to those harmed by the infringement taken into account by the court when calculating the award?

The CCPC does not have the power to impose fines.

The calculation of damages is based on the loss suffered by a plaintiff. Therefore, an Irish court is unlikely to take into account fines imposed by other competition authorities in the calculation of ordinary damages. However, where the question of exemplary damages arises, such factors may be considered.

We are not aware of an Irish competition case in which a redress scheme was offered by the defendant to the plaintiff in respect of the infringement concerned in advance of determination of the proceedings. However, given that the general principle applicable to the calculation of damages is one of compensation for loss suffered, it is conceivable that a court could take into account if a redress scheme had been offered by the defendant and accepted by the plaintiff in determining the damages to be awarded in respect of the same matter.

To read this article in full, please click here.

Originally published by ICLG

This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.

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