UK: Carrots and/or Sticks - Can Businesses Expect to be Involved in More Private Law Damages Claims for Breach of Competition Law?

Last Updated: 1 March 2006
Article by Adrian Wood

Originally published February 2006

Are we about to witness an increase in competition law enforcement activity in the UK courts at the hands of ordinary consumers, representative consumer bodies or competing businesses? Have businesses given any thought to how they could use competition law as a sword and not just as a shield? February 2006

EU sponsored research has shown that very few successful private law claims are brought in national courts to enforce competition law. In the case of the UK, in reality, most competition law enforcement is still undertaken by the public sector, through the medium of the Office of Fair Trading (OFT) and other sectoral regulators such as OFGEM. There are, however, signs that the balance between public and private sector competition law enforcement is changing, albeit slowly. So, for example, the recent case of Attheraces Ltd & Anor v British Horse Racing Board [2005] EWHC 3015 (CH) 21 December 2005 was one of the first successful Art 82 claims in the English civil courts under the new competition regime. The open door policy of the English courts is also becoming a factor.

Back in 2003, the High Court held in Provimi Ltd v Aventis Animal Nutrition SA and others [2003] EWHC 961 that a foreign claimant could bring an action for damages in the English courts against an English subsidiary of a foreign parent, even where the loss suffered outside the UK was caused solely by the anti-competitive behaviour of the foreign parent. The English courts were said to have jurisdiction to award the foreign claimant damages for its entire loss, as long as the subsidiary forms part of the same undertaking as the foreign parent for competition law purposes. Against this backdrop, the EU has tried to stimulate a debate about the appropriate balance between public and private competition law enforcement. To lessen the burden on national competition authorities, the European Commission started a consultation in December 2005 on how to increase the use of private law claims for damages for breach of competition law without creating a competition litigation culture.

This article outlines factors that need to be borne in mind by those considering bringing competition claims for damages in the UK and points to a number of questions that require resolution before we can expect to see a greater volume of competition litigation in the UK courts.

Some factors that might hinder private law enforcement in the UK

At first blush, it might be thought surprising that few UK businesses have used the High Court to claim damages for breach of competition law, especially as we now have, following implementation of the Enterprise Act 2002, theoretically one of the most accessible court-based dispute resolution systems in a first world economy. A number of factors are no doubt responsible:

  • We have a Catch-22 situation. The paucity of cases in the UK courts has not enabled Chancery judges to demonstrate their confidence in handling complex econometric analysis. This in turn prevents judges gaining necessary experience. Although there is also a specialist Competition Appeal Tribunal (CAT) capable of handling monetary based competition law claims, knowledge of its jurisdiction is still not widespread;
  • Competition law claims can be very costly, as there will often be a need to establish the underlying economic market on which the alleged infringement occurred, unless an infringement finding has already been made by the OFT, CAT or European Commission;
  • Private law claimants do not have available to them an arsenal of public sector enforcement and disclosure powers (electronic surveillance, entry warrants, financial penalties for delayed disclosure of information etc);
  • Complaints to regulators can be a much cheaper solution for claimants. Litigation can be an expensive route for claimants and there may be significant uncertainty over whether successful claimants will always be able to recover full costs;
  • Victims of anti-competitive behaviour may depend for a large part of their business on dealings with competition law infringers. Small businesses often feel it would be suicidal to alienate their main customers; and
  • Direct victims of cartels may be able to pass on to their customers the cost to their business of the anticompetitive behaviour, so the direct consequences of the behaviour are camouflaged and victims are not incentivised to bring claims.

Interrelated conceptual and legal questions that require answers

Even if none of the above factors is relevant, some putative claimants point to a number of unresolved broader policy and legal questions that impact on the decision whether or not to take court action. For example:

  • Should infringers be allowed to escape sanction by pointing to the fact that those who purchased from them passed on the additional costs of the anticompetitive behaviour to indirect third party purchasers?
  • Should infringers normally receive a ‘reward’ for bringing successful infringement actions in the courts? In the USA, where 90% of competition law enforcement actions are brought by individuals or businesses, courts can in certain situations award the claimant treble damages to mark the gravity of the infringement. This remedy may serve to incentivise claimants as well as act as a deterrent to infringers, but many commentators criticise the idea of courts awarding windfall payments to claimants.
  • But if claimants are incentivised by the availability of large damages awards, will that result in fewer findings of infringement being made by national regulators because whistle blowers will be more reluctant to come forward and ‘shop’ fellow cartel members for fear that they might expose themselves to the risk of expensive third party claims?
  • If punitive damages awards are not deemed acceptable per se in national law and a claimant's loss is smaller than the infringer's gain, in what circumstances would it be possible to develop the law on restitution or account of profits to embrace claims with a competition element?
  • In order to limit the risk of a competition law based claim culture emerging, how should the courts apply concepts of causation and remoteness to competition law based claims?

Discussion and Summary

Clearly in volume terms, there has been very little competition litigation to date in the UK courts. But the backcloth is changing and a number of factors may be contributing to a head of steam favouring the private law enforcement route. First, the OFT's public sector stick has been found to be wanting by the UK's National Audit Office. Second, a number of pronouncements from the EU and UK competition regulatory bodies suggest that enforcement agencies will not be concentrating in the future on complaints made by businesses against their competitors. Third, although the claimants in Attheraces were seeking declarations and an injunction rather than damages, we can expect the case will revive interest in using the ordinary courts as a vehicle for competition law enforcement. Fourthly, further impetus to the private law route was given recently by the Opinion in cases C-295 to 298/04 Manfredi, where the Advocate-General stated that third parties should be able to claim damages for breach of competition law in their national courts in circumstances where there is a causal link between the infringing agreement or concerted practice and the harm suffered.

The institutional framework and locus standi for bringing such private law claims already exists in the UK but confidence in the procedural and evidential mechanisms has traditionally been lacking. A number of developments over the last 9 months suggest however that we may be on the cusp of witnessing a surge in interest in the use of the courts as a recovery vehicle for competition law claims. For example:

  • There is a growing realisation that reforms introduced by the Enterprise Act 2002 reduce the evidentiary burden of proof on claimants. In particular, litigants can now rely upon infringement decisions of the OFT and European Commission as determinations of fact. This provision saves claimants the cost of proving the underlying unlawfulness of the defendant's behaviour;
  • Many of the infringement decisions of the Competition authorities relate to cartels involving raw materials. Businesses operating across a wide number of sectors are coming under pressure from their shareholders to consider how to recover wasted expenditure caused by those cartels;
  • The Commission's December 2005 consultation on damages is itself a response to pressure from businesses to explore ways in which access to the courts can be made easier for third party claimants that have suffered loss;
  • There is a growing interest in the use of class actions, particularly as a result of successful claims made in the USA. Inevitably, claims in the USA against international cartels will sometimes involve EU based businesses. As a natural spill-over effect, we can expect to see damages claims being made in the EU against such international cartelists. Moreover the designation by the Government in October 2005 of the Consumers Association as the representative body for bringing monetary based claims under the Competition Act 1998 on behalf of consumers will mean it is only a question of time before the first claim is brought; and
  • There is strong anecdotal evidence that a number of competition and EU law based damages actions have been settled out of court in the UK. Moreover, there is evidence to suggest that national courts across the EU are beginning to see an upturn in competition related claims. The Advocate-General's recent Opinion in Case 295/04 Manfredi will fuel that discussion.

A balanced mix of sticks and incentives (speedy access to courts, effective disclosure rules, use of class actions etc) should ensure that only genuine cases come to court. Offering juicy carrots in the form of damages awards based on a multiplier is unlikely to provide a satisfactory outcome for all stakeholders. Moreover too many carrots may produce too many rampant rabbits, resulting in additional costs to consumers arising from the purchase by businesses of extended insurance cover. Competition Law is littered with examples of where over-regulation has produced detrimental consequences for consumers. Hopefully such mistakes will not be repeated when the European Commission comes to consider the possibility of a White Paper on damages actions.

Despite the considerations noted earlier, it is only a question of time before we begin to see both UK national courts and alternative dispute resolution systems being used regularly for competition law claims. Businesses should be considering now both how they can take advantage of these mechanisms to secure competitive advantages as well as how to develop appropriate competition compliance responses to limit the threat that such claims against them could bring.

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.