UK: Private Competition Law Actions To Receive A Boost From Proposed European Legislation And New UK Statute

Last Updated: 2 August 2013
Article by Becket McGrath and Trupti Reddy

After an extremely long gestation period, on 11 June the European Commission (Commission) finally published a package of documents setting out its proposals for improving redress for violations of rights granted under European Union (EU) law, including infringements of competition law. The package of documents comprises:

  • a Commission Communication on collective redress, entitled "Towards a European Horizontal Framework for Collective Redress";

  • a Commission Recommendation on common principles for collective redress mechanisms (the Recommendation);

  • a proposed Directive to establish common rules governing private damages actions for infringements of EU and national competition laws across the EU (the Directive);

  • a Commission Communication on quantifying harm in antitrust cases; and

  • a more detailed 'practical guide' on quantifying harm in antitrust cases, to accompany the second Communication, including analysis of various potential methods for quantification of harm.

EU law recognises the right of victims of an infringement of the law to claim damages for loss caused by that infringement from an infringing party. Although the application of this principle to claims based on breaches of EU competition law was confirmed beyond doubt as far back as 2001, private competition law actions before Member State courts have, in practice, been limited. The Commission estimates that, in the past seven years, victims sought to obtain compensation in only 25% of cases in which the Commission found an infringement.

As well as the usual cost and uncertainty faced by parties to any litigation, competition law claims face a number of additional challenges. First, it may be difficult to prove that the infringement took place. Although this difficulty can be addressed by basing a claim on a prior finding of infringement by a competition authority (a so-called 'follow-on' action), claimants still fact the challenge of showing causation and quantifying their loss. Quantification can be particularly difficult in practice, since it typically requires the claimant to show what it would have earned in the absence of the infringing conduct (e.g. if it had not had to pay an inflated price for a cartelised product).  The claimant may also have rebut a defendant's argument that the claimant's loss was reduced by its ability to raise its prices to its own customers and therefore pass its loss down the supply chain (the 'passing on defence').  Further complicating the picture, differences between national systems regarding access to documentary evidence may mean that claimants face difficulties in obtaining the necessary evidence to support their claim. 

Although the courts of a number of Member States, including the UK, Germany and the Netherlands, have shown themselves to be perfectly willing and able to grapple with these issues, other jurisdictions have seen few or no claims. While such variations in approach are understandable, given the wide differences between national legal systems, concerns of a more political nature have emerged. In particular, some national governments, consumer bodies and the Commission expressed concerns that, while direct purchasers of cartelised products may have the ability, resources and incentive to claim for losses they have suffered as a result of anticompetitive behaviour, this was not the case for end-consumers, i.e. those who were likely to have ultimately borne the loss, assuming that higher costs were passed on down the supply chain.  While it could be said in response that half a loaf is better than no bread, in that such claims at least ensure that cartelists end up paying something to at least some of their victims, some observers appear to have viewed such an outcome as instead amounting to a form of unjust enrichment of direct purchaser claimants, who tend to be larger businesses. These concerns promoted examination of ways in which large numbers of indirect purchaser claims could be combined to enable effective collective redress, while avoiding the perceived evils of a 'class-action culture'.

Since the motivation for more effective collective redress mechanisms is not confined to the competition law area, there has been ongoing debate as to whether any EU-wide legislative action on collective redress should be limited to competition law (a 'vertical measure') or should extend to other areas where there may be a need for more effective collective redress mechanisms (a 'horizontal measure'). Whereas any measure limited to competition law is largely in the hands of the Commission's competition directorate general (DG COMP), responsibility for any horizontal measure is shared across a number of other DGs, including Consumer Affairs and Justice. 

Unsurprisingly perhaps, the above multiple challenges and complexity led to the publication of a bewildering number of papers over an extended period but little concrete action at an EU level. Particular milestones included a Commission Green Paper on private competition law actions in 2005, a White Paper in 2008, and a 2011 consultation on collective redress to identify common principles across the legal systems of the EU and Member States. In between, the Commission prepared a draft Directive on competition damages actions, which was never published and was quietly dropped in 2009, following political opposition from the European Parliament. In the meantime, national legal systems developed their own solutions to the challenge of promoting collective redress, with varying degrees of success.

Publication of this package of documents shows that the Commission is finally ready to proceed with legislation to facilitate competition law damages actions across the EU, while expressing a broader desire to see Member States introducing collective redress mechanisms on a wider basis. In taking this approach, the Commission appears to be seeking to improve the chances that a directive on competition law actions will this time be adopted, by moving the more controversial aspects of the previous draft directive concerning collective redress into the more aspirational Recommendation.

The Directive

The Directive sets out a number of measures intended to facilitate competition law damages actions. It largely seeks to do so by creating a clear legal basis for such actions and by removing current impediments that have arisen in at least some Member States. As a result, it proposes:

  • introducing a power for national courts to order companies to disclose evidence;

  • making infringement decisions of national competition authorities (NCAs) binding before national courts of all Member States;

  • clarifying rules on limitation periods, to provide for a minimum limitation period of five years;

  • introducing a rebuttable presumption that an infringement caused harm (with no presumption as to the level);

  • expressly permitting the passing-on defence, unless it is "legally impossible" for the indirect purchaser to bring a claim, and introducing a rebuttable presumption that harm was passed on to indirect customers; and

  • putting in place rules to facilitate consensual dispute resolution and settlements.

The Directive also proposes to resolve a lack of clarity in one specific area, namely how the balance should be struck between the Commission's interest in encouraging infringers to come forward and confess under its leniency regime and a claimant's interest in gaining access to confidential documents on the Commission's case file that could help its case. The Commission's leniency regime relies on the incentive for a cartelist to 'blow the whistle', and thereby benefit from immunity from fines, being greater than its reluctance to admit its involvement and thereby trigger an investigation and possible follow-on claims. Clearly, the more likely it is that an investigation will trigger damages claims, and the greater the likelihood that a confession delivered to the Commission to gain immunity from fines will be used against the confessing party in those damages proceedings, the less likely a party is to come forward to seek leniency in the first place.

The Directive addresses this problem by providing for:

  • absolute protection from disclosure for corporate leniency statements and settlement submissions; and

  • temporary protection (until the Commission or NCA has closed its proceedings) of documents prepared specifically for the purpose of public enforcement proceedings (e.g. replies to requests for information) or that the authority has drawn up during proceedings (e.g. a statement of objections).

In another measure to prevent greater private actions reducing the incentive to apply for leniency, the Directive provides that, while any infringer should be responsible towards victims for the whole harm caused by the infringement (i.e. joint and several liability), any infringer who cooperated with an investigation and obtained immunity from fines should be liable only for the harm caused to its own direct or indirect customers. In other words, with limited exceptions, successful leniency applicants should not be subject to joint and several liability.

The Recommendation

The Recommendation sets out the Commission's proposals for a common approach to collective redress across Member States, with the aim of enhancing the ability of consumers and SMEs to bring damages actions for the violation of EU laws where the violation has caused losses, including in relation to competition law infringements, while ensuring adequate safeguards to prevent the risk of abusive litigation. It seeks to do this by inviting Member States to introduce national collective redress systems with certain common principles that should be respected. These principles include a system: allowing for injunctive relief and damages; that is not prohibitively expensive; based on the opt-in principle; giving the judge the central role of effectively managing the case; and promoting consensual, voluntary, alternative dispute resolution regimes.

Other recommended safeguards include a suggestion that contingency fees and punitive damages be prohibited; any representative actions be permitted only by officially designated non-profit representative bodies with sufficient finances and with a direct relationship with the EU laws that have allegedly been violated; and restrictions on third party funding. To ensure a balance between public enforcement and private actions, the Recommendation recommends that "as a general rule" collective actions should be possible only once a public authority has found an infringement.


If adopted, the proposed Directive should provide some welcome clarity and certainty in a number of areas, particularly with respect to access to leniency documents and other documents on the Commission's case file. At present, it has been left for national courts to decide on a case by case basis whether and to what extent claimants can access such documents. This position was restated by the European Court of Justice as recently as 6 June, when it stated that the need to protect leniency documents from third parties does "not necessarily mean that access may be systematically refused, since any requests for access to the documents must... tak[e] into account all of the relevant factors in the case".

Although the English High Court has demonstrated (in the ongoing National Grid Gas Insulated Switchgear damages case) that it is perfectly willing to take on this balancing task, the Commission has clearly taken the view that the current level of uncertainty is unacceptable and that, without legally binding action at the EU level, the effectiveness of leniency programmes could be seriously undermined.

In some areas, the Directive simply confirms the existing position for competition law damages claims, at least under English tort law, so many of the provisions will appear uncontroversial to a common law audience. Other proposals, including in particular the presumption of passing-on, may actually make it harder for direct purchasers to bring claims, while doing little to facilitate claims by indirect purchase actions in the absence of effective means of collective redress. It would seem to be rather counterproductive if a measure designed to facilitate competition claims were in fact to make it harder for claimants to bring precisely those claims that currently stand the best chances of success.

The fact that the tectonic plates are finally moving at the EU level does not mean that nothing is happening at the level of Member States. In fact, the day after the Commission published its Directive and Recommendation, the UK government's Department for Business, Innovation & Skills published its Draft Consumer Rights Bill (the Bill) for pre-legislative scrutiny.  This includes provisions to implement wide ranging reforms to the private competition law actions regime in the UK (see our earlier client advisory here), including the introduction of a limited opt-out collective actions regime. It is particularly interesting to note this aspect, in light of the Commission's stated preference for an opt-in system, albeit while recognising that exceptions may be "justified by reasons of sound administration of justice".

It is unclear how the Bill and the proposed Directive will fare as they pass through the UK Parliament and the European Parliament respectively, and to what extent the timing of the two will fit together. Approval of the Directive in its current form is by no means guaranteed: the proposals may upset some countries where major changes to their civil procedure rules are required, particularly those with strict disclosure laws, and there is bound to be lobbying by those concerned that even this limited measure could lead to unwanted litigation against businesses.

Even if the Directive is adopted, it will still need to be implemented by Member States into national law, opening the possibility of divergent approaches and new uncertainty. Ambiguities in the text of the Directive, for example concerning how liability will be apportioned between infringers, may ultimately need to be resolved by the courts.

It is even less clear how, and to what extent, the aspirations set out in the Recommendation will be implemented by Member States. Although the Recommendation states that Member States "should implement the principles" it sets out within two years, this is not binding and it will be four years before the Commission will assess the implementation of the Recommendation. Depending on the level and practical impact of any implementation, "further measures" (presumably including legislation) may then be considered. It is clear from this that the Recommendation represents merely the most recent, rather than the last, word of the Commission on the subject of collective redress. 

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.