UK: New UK Consumer Rights Act Has Implications For Private Damages Actions In Competition Law

The new Consumer Rights Act 2015 ("CRA") adopted on 26 March 2015 will introduce significant changes to the private enforcement of competition law in the UK. The CRA is expected to enter into effect by 1 October 2015 and, according to the UK government, represents some of the most significant reforms concerning consumer law to be enacted within a generation. This reform has serious implications for private actions involving breaches of competition law by expanding the powers of the Competition Appeal Tribunal ("CAT") and introducing new procedures for collective proceedings and collective settlement. These developments further demonstrate how the UK regulator is aiming to crack down on anti-competitive behaviour.

Expanding the powers of the CAT

The CRA provides for the expansion of the jurisdiction and the powers of the CAT, which is expected to have the effect of turning the UK's specialist antitrust court into a first-class competition court of preference. UK courts in general have long been favoured as a jurisdiction for competition claims due to their favourable disclosure rules as well as their willingness to assert jurisdiction. However, barriers were in place for competition claimants looking to bring 'stand-alone cases', where the High Court was the only viable venue – as the CAT did not have statutory authority to hear such cases. The current reform aims to thereby improve claimants' access to remedy through the following means:

Hearing 'stand-alone cases': The CAT will be able to adjudicate on 'stand-alone cases' (i.e., damages actions where there has been no finding of infringement by a competition authority against the defendant) as opposed to the current limited system of hearing 'follow-on actions' only. Following the reform, the CAT will have jurisdiction to hear stand-alone and follow-on claims, as well as cases involving both.

Implementing a 'fast-track': A new fast-track procedure will be introduced by the CAT, allowing for simpler cases (i.e., those involving less cost and evidence) to be resolved more expediently. This reform is meant to enable SMEs to bring private actions against larger corporations whose behaviour has been alleged to be anti-competitive and in breach of competition rules.

Granting injunctions: The CAT will be able to issue injunctions, providing claimants' with immediate relief by requiring cessation of anti-competitive conduct. This reform will be particularly useful for 'fast-track' cases, where the scope for relief will be considered early on in the process. This approach broadens the powers of the CAT from its current ability to award damages only.

Extending the limitation period: The CRA aligns the limitation period for bringing claims before the CAT with those applicable to bringing a civil claim before the High Court, i.e., six years from the date on which the cause of action accrued.

Collective actions and settlement

The CRA introduces new procedures for collective actions and collective settlement, as well as a redress scheme. The object of the reform is to provide prospective claimants with effective means to enforcement. However, broadening the scope of collective actions has caused some commentators to worry that the UK could be headed in the direction of US-style class actions. To avert such concerns, the CRA provides for safeguards which prohibit damages-based fee arrangements and exemplary damages in collective actions. The new procedures set out as follows:

Implementing 'opt-out' collective actions: The CRA broadens the range of representatives to a private damages action by including anyone (i.e., businesses, individuals or trade associations) directly affected by the alleged infringement, as long as the CAT deems such representatives as 'just and reasonable'. Thus, the effect could be that all UK customers affected by the infringement could be represented unless they actively seek to 'opt-out' of the action. In addition, non-UK customers may 'opt-in' to the action and can therefore be represented before the CAT. This reform is in contrast to the current approach in which a designated body (i.e., the consumer association Which?) must bring a collective damages action before the CAT and affected individuals to a collective action must 'opt-in'.

Increasing damages calculations: The CAT will be able to assess damages on an aggregated basis for the group, as opposed to the current approach which calculates damages on an individual basis as per opted-in claimant. Under this new approach, any awarded damages that are unclaimed within a specified period will either be paid: (i) to a prescribed charity; or (ii) towards a representative's costs as incurred in connection with the proceedings.

Implementing 'opt-out' collective settlement: The CRA provides for the possibility of representatives to collectively settle a case prior to bringing the claim before the CAT, so long as the CAT then deems the terms of settlement 'just and reasonable'. The representatives may negotiate on behalf of all UK claimants (as part of one group) who have not 'opted-out' as well as those non-UK claimants that have 'opted-in'.

Implementing a redress scheme: The CRA provides for the Competition and Markets Authority ("CMA") to authorise voluntary redress schemes whereby companies that have been the subject of an infringement finding – by the CMA itself or the European Commission – may offer compensation in consequence of an infringement decision. In return, the CMA can take account of this form of cooperation when assessing the level of the fine. It is, however, important to note that the scheme will not have the effect of protecting the company in breach of competition rules from being subject to private damages actions.

The changes outlined under the CRA and applicable to private damages actions in competition law are significant. They are expected to have an impact on the number of claims brought before the CAT and the size of damages paid out to claimants. They broaden the horizon of consumer litigation and also ease the way for more business-to-business claims, particularly as SMEs are encouraged to seek redress for harm suffered due to infringing conduct by larger entities.

It should be noted that further reforms will soon be needed to bring UK law into alignment with the EU Directive 2014/104 of the European Parliament and the Council of 26 November 2014 on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union (see VBB on Competition Law, Volume 2014, No. 11,available at www.vbb.com). The EU Directive was adopted when the CRA had already been designed and its adoption process was in a final stage. Some aspects of the EU Directive, which will further facilitate private enforcement claims, were thus not covered by the CRA such as amendments to the applicable limitation periods under UK law, the introduction of a rebuttable presumption of harm and additional terms of settlement (i.e., when settling infringers can be asked to contribute to damages, or the size of reductions in damages claims in an action brought against a non-settling party involved in the infringement).

The full CRA can be accessed here: http://www.legislation.gov.uk/ukpga/2015/15/pdfs/ukpga_20150015_en.pdf

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 Mondaq.com.

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

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions