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An independent report commissioned by the European Parliament
("EP") and published on 12 June 2012 has expressed strong
support for plans for EU-level regulation aimed at encouraging the
initiation of damages claims by consumers and small companies who
wish to seek redress for harm caused by anti-competitive conduct
(the "Report").
The Report, entitled "Collective Redress in
Antitrust", was commissioned by the EP's Economic and
Monetary Affairs Committee ("EMAC") and authored by Lear,
an Italian economic, antitrust and regulatory consulting firm. It
should be noted that the content of the Report is not meant to
represent the current official position of the EP.
The Report gives firm support to the adoption of a specific
Regulation, as opposed to a Directive, for antitrust damages
actions, thereby avoiding divergences in national laws. The authors
argue that "an EU-wide system may produce significant
benefits both for claimants (i.e. consumers and small and
medium-sized enterprises) and defendants (in particular, large
undertakings)."
The inclusion of an "opt-out" mechanism is also
discussed in the Report, under which consumers or businesses would
automatically be made party to a claim without having to "opt
in" to the action. However, the authors recommend that such a
mechanism should be permitted only under very specific and
regulated conditions when consumers cannot reasonably be expected
to opt in to a collective action.
At the present time, 19 of the 27 EU Member States provide for
some form of collective action system, but, as the Report notes,
only Portugal offers an opt-out process. Moreover, it points out
that the current systems at national level have not, in general,
been very successful in improving consumers' and companies'
access to damages compensation.
The Report also acknowledges the risks that the pursuing of
private enforcement by injured parties might diminish the
attractiveness of the Commission's leniency program by
dissuading cartel members from blowing the whistle. The authors
therefore propose limiting the exposure of whistleblowers to
damages claims.
Additionally, the Report advocates allowing damages actions to
be brought not only as a "collective" of injured parties,
but also by a specific body acting on behalf of injured parties.
Furthermore, it suggests that cartel decisions in one EU Member
State should be binding on courts in other Member States, a concept
which would have the effect of encouraging cross-border claims.
The Report also supports the principle of "losing party
pays" as a safeguard against the possibility of unmeritorious
damages claims. The principle is already applicable in many Member
States and forces parties to consider overall legal costs before
initiating damages actions.
The Report, if endorsed, would entail a significant change in
tone for the EP, many of whose members ("MEPs") have
traditionally been reluctant to support legislative action in the
antitrust area - partly as a result of opposition from large
companies who fear the prospect of heavy punitive damages. However,
since it is the result of an independent study, MEPs are unlikely
to feel bound by the Report's findings.
The European Commission has been considering the issue of
collective redress policies since October 2010, but despite
launching a consultation procedure last year, it has yet to adopt a
definitive legislative framework. Notwithstanding this latest
Report, as well as the recent declaration by Commission
Vice-President Viviane Reding that an initiative on collective
redress has not been abandoned, it is considered unlikely that the
policy review will produce any concrete result in the near
future.
It is also worth mentioning that in April 2012, the United
Kingdom government submitted a legislative proposal to allow a
limited system of "opt-out" collective actions in
competition law cases, which would be subject to the approval of
the country's specialised competition court.
The full text of Lear's Report on Collective Redress in
Antitrust can be accessed at:
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.
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