UK: UK Proposals To Increase Private Enforcement Of Competition Law

On 24 April 2012, the United Kingdom's Department for Business, Innovation & Skills published a 70-page document entitled Private Actions in Competition Law: A Consultation on Options for Reform (the Consultation) (available at

The Consultation contains some far-reaching ideas. If many or all are implemented, it could greatly increase private enforcement of competition law in the UK. In particular, the Consultation discusses:

  • Introducing an "opt-out" collective action for damages; under this collective action, the Competition Appeal Tribunal (CAT) would assess damages for a represented group of claimants, which would be bound by the outcome unless they affirmatively opt-out of the action, but claimants could come forward after the damages' award to claim their share.
  • Preserving the incentives for whistleblowers to inform competition authorities about cartels by legislating to: (i) protect leniency applications from disclosure in damages claims; and (ii) absolve an amnesty applicant from joint and several liability for all the damage caused by a cartel.
  • Widening the specialist CAT's powers to allow it to (i) rule more generally on claims for damages (and not only on claims following from an earlier finding of an infringement by a competition authority); and (ii) grant injunctions.
  • Encouraging alternative dispute resolution (ADR) and enabling the Office of Fair Trading (OFT) to require that companies found to have infringed competition law compensate victims of their behaviour.

The Government's consultation period for the proposal runs until 24 July 2012.

An Opt-out Collective Action

The most radical proposal is an "opt-out" collective action before the CAT.1 Currently, UK law only allows collective claims for damages in the form of "opt-in" follow-on claims on behalf of consumers. Under the current rules, claimants must opt-in to the procedure and actually be named on the claim form. Moreover, the procedure only applies when a competition authority has already ruled that a company has infringed competition law. And it only applies to consumers. The Consultation argues that these conditions are too restrictive and notes that in almost 10 years, there has been only one collective action case. (That was an action brought by Which? following the OFT's decision fining a sport equipment retailer, JJB Sports, UK £6.7 million for fixing prices of replica football shirts, where only 130 claimants (estimated to be only 0.1% of the affected consumers) joined the action and each received UK £20 to compensate for the estimated mark-up.)

The proposed opt-out system would allow both businesses and consumers to participate in collective actions. These actions could be brought on a stand-alone basis, rather than limited to cases where a competition authority has already found a breach of competition law. For a stand-alone claim, the claimant would have to establish that competition law has been infringed and proof of loss. The CAT, which would be the only court competent to hear these claims, would assess damages based on an estimate of the total size of the consumer group potentially affected by the illegal conduct. If this change is implemented, it will greatly increase defendants' exposure to damages in the UK.

The Government is wary of promoting a "litigation culture", but believes that its proposal builds in enough safeguards to protect defendants. In particular, it proposes that:

  • The opt-out collective action would be limited to competition law infringements.
  • Only actual, and not punitive or treble damages, would be awarded.
  • The existing "loser pays" rule, which requires unsuccessful claimants to cover the defendants' costs, would be retained.
  • The CAT, as a specialised competition law tribunal, would enjoy exclusive jurisdiction over the action.
  • The CAT would have to certify that the individual or body bringing the claim is suitable and sufficiently representative of the class of claimants (this would normally exclude law firms and third party funders from bringing an action).
  • Lawyers would be prohibited from charging contingency fees, under which they take a percentage of the damages; lawyers could, however, charge conditional "no win no fee" fees and receive an increased fee if the case is successful.

Clearly this is all very controversial.

Protecting Whistleblowers and the Amnesty/Leniency Regimes

The Consultation recognises that vigorous private enforcement could alter potential whistleblowers' incentives when considering applying for leniency to the OFT or the European Commission. It emphasises the importance of public enforcement of competition law and the central role of leniency applicants in bringing cartels to the attention of authorities. To preserve whistleblowers' incentives, the Consultation suggests two important reforms.

  • First, mainly in response to the European Court of Justice's 2011 Pfleiderer judgment (Case C-360/09, Judgment of 14 June 2011), the Government discusses legislating to protect documents prepared exclusively for an amnesty/leniency application from disclosure in private damages litigation. In Pfleiderer, the European Court of Justice ruled that Member State courts must balance the public interest in disclosing to claimants documents submitted by a leniency applicant in a public enforcement procedure (in that case to the German Competition Authority), thereby possibly enabling claimants to substantiate claims for damages, against the need to protect the effectiveness of and incentives offered to applicants under leniency programmes.2 The Consultation notes that the European Commission may also legislate to prevent disclosure of leniency documents but emphasises that, if the opt-out collective action regime is implemented in the UK, such legislation would be needed urgently. Beyond its immediate effects in the EU, legislation by the UK or the EU to protect leniency documents might also help defeat attempts by the plaintiff bar to obtain disclosure in third countries (most importantly in the US), although it will be for those countries' courts to consider what deference should be granted to EU or UK legislation.
  • Second, the Consultation proposes that the liability of leniency applicants be limited to damages directly caused by their conduct. They would no longer be jointly and severally liable for all damage caused by the cartel. This proposal may appear quite radical, but it is in line with the US ACPERA legislation (which does away with joint and several liability for immunity applicants and limits their liability to single damages, provided they cooperate with plaintiffs' efforts to sue other cartel participants).

Expanded Jurisdiction for the CAT

The CAT is a specialist competition court with an established good reputation. To date, however, its jurisdiction has been limited to follow-on damages claims (after a competition authority has found illegal conduct). The Government proposes to expand this jurisdiction to allow the CAT to rule generally on claims for damages, whether or not a competition authority has already found illegal conduct. In addition, the Consultation suggests enabling the transfer of cases (or parts of cases) with competition law aspects from the High Court (or Scotland's Court of Session) to the CAT.

The Consultation also seeks views on two important evidentiary aspects of private competition law enforcement:

  • First, it proposes introducing a statutory rebuttable presumption that cartels raise prices by a fixed amount, which is currently suggested at 20%. Either the claimant or the defendant could rebut this presumption with economic evidence. While the Consultation considers that this presumption will encourage consumers to bring cases, the underlying premise that cartels normally increase prices by anything like 20% is highly controversial and eminently questionable. The prevailing view among economists is that there is no solid evidentiary support for such a presumption.
  • Second, the Consultation considers, but ultimately rejects, legislating to allow explicitly the passing-on defence under which defendants can argue that the claimant passed on the entirety of the cartel overcharge to an indirect purchaser. The Consultation recalls that courts have not yet definitively decided if this defence is part of English law, yet it expresses the view that there is no reason based on legal principle for it not to be. The Consultation also notes that it might be more appropriate to address this issue at the proper EU level.

The Consultation also proposes that the CAT have power to grant injunctive relief, which it currently lacks. As the Consultation recognises, in particular for small and medium enterprises (SMEs) claimants, injunctions can be just as important a tool for private enforcement as the possibility of damages.

The Consultation considers the possibility of a cheaper, quicker and simpler fast-track procedure for SMEs. The Consultation observes that the details would still largely need to be determined, but it suggests that both the claimants' potential damages and their liability for costs in case of failure would be capped.

ADR and Potential OFT Role in Ordering Compensation

The Consultation considers whether ADR should be mandatory before a claimant pursues private litigation, but rejects this. It does, however, put forward some ideas on how the CAT could encourage ADR; these include facilitating a formal collective settlement (such a procedure already exists in Dutch law).

The Government also considers giving the OFT discretionary power to oblige companies to compensate victims of their anti-competitive conduct. This power would only be used if the OFT had already concluded that the company had behaved illegally. The OFT would not quantify individual losses, but might define the types of loss that could be compensated and direct how compensation might be calculated; the company would then have to apply the OFT's guidance to individual cases. Rather than waiting for the OFT to impose a compensation scheme, companies could voluntarily agree to compensate and the Consultation suggests that in certain–unspecified–situations voluntary compensation might be a mitigating factor warranting a "modest" (five to 10 percent) fine reduction.

Next Steps

The Consultation period is open to 24 July 2012. The Government will publish all responses online and, within three months of 24 July, publish its conclusions based on these responses. Many of the proposals, if they are ultimately retained, will need either primary or secondary legislation before becoming law.


1. The European Commission carried out a consultation on collective redress in 2011; see Towards a Coherent European Approach on Collective Redress available at The Commission is apparently considering what follow-on proposals to make.

2. See also National Grid, in which the English High Court applied the principles of Pfleiderer to leniency documents submitted to the European Commission, Claim HC08C03243, National Grid Electricity Transmission plc v ABB Ltd and others, judgment of 4 April 2012.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.