The Directive on antitrust damages actions encourages consumers and businesses that have suffered loss from violations of EU competition law to turn to Member State courts for compensation.

On 10 November 2014, the EU Council of Ministers adopted the Directive on antitrust damages actions, which will have to be implemented into national regimes by November 2016. The Directive affirms Europe's commitment to tackle discrepancies between Member States and provides victims of anticompetitive behaviour with powerful assistance to obtain compensation including a presumption that every competition infringement causes harm.

"We need a more robust competition culture in Europe. So I am very glad that the Council has now also formally approved the Directive on antitrust damages actions. I am very pleased that it will be easier for European citizens and companies to receive effective compensation for harm caused by antitrust violations."
Margrethe Vestager, EU Competition Commissioner

The Directive introduces common standards to ensure claimants will be able to obtain compensation for the loss they have suffered regardless of the Member State in which they are domiciled or where they suffered the loss in the EU.

Access to evidence

The Directive enables national courts to order defendants or third parties to disclose evidence which is in their control, to victims claiming damages, including evidence on the file of a competition authority. While a wide ranging disclosure regime already exists in the UK, this new development opens a disclosure process for claimants to substantiate the damages they are claiming in other Member States where disclosure was not previously or otherwise practicably available.

Binding effect

A final decision of a national competition authority finding a breach of competition law will be binding on the courts of the same Member State in which the infringement occurred. In actions before courts of other Member States, claimants will also be able to present such decisions as evidence of the infringement. This will allow claimants to select the most favourable jurisdiction irrespective of which competition authority's decision they are relying on for their claim.

Limitation periods

The Directive remedies disparities between Member States by stating that limitation periods must be at least five years from 'the date of knowledge', which offers much more flexibility to claimants. Importantly, the limitation period will be suspended for at least a year after the infringement decision has become final. This will result in a considerable extension of the applicable limitation period in, for example, Germany, Spain and Sweden.

"This is a major cultural change in the approach by European authorities to provide meaningful access to vindicate rights of its citizens."
Michael D. Hausfeld, Chairman

Settlements

The Directive introduces certain rules to facilitate consensual settlements between victims and cartelists such as the suspension of limitation periods during settlement discussions, allowing for greater flexibility in the resolution of damages claims.

Cultural change

The Directive encourages those that have suffered loss from violations of EU competition law to turn to the courts for compensation as companies recognise that they are bound by a duty to their shareholders to seek compensation and recover the often significant sums of damages caused by competition infringements.

UK Consumer Rights Bill

The Directive should be viewed alongside the Consumer Rights Bill in the UK, which will further facilitate collective redress for consumers and businesses. Of significance, the Directive does not rule out the use of an opt‐out collective action mechanism such as the one proposed in the Bill. Under an opt‐out regime, claimants within a class will automatically be included in an action, unless they take the necessary steps to opt‐out. The Bill was submitted to a third reading in the House of Lords on 5 November 2014. Royal Assent is now anticipated for October 2015, subject to any last‐minute consideration of amendments to the Bill after the third reading committee stage.

Directive on antitrust damages actions: an overview " Access to evidence: national courts can order cartelists or third parties to disclose evidence which is in their control;

  • Binding effect: a final decision of a national competition authority finding a breach of competition law will be binding on the courts of the same Member State in which the infringement occurred;
  • Limitation periods: claimants will effectively have at least five years to bring claims once an infringement decision by a competition authority has become final;
  • Presumption of harm: claimants will benefit from a presumption that every competition infringement causes harm, placing the burden of proof on the defendants to demonstrate otherwise; and
  • Settlements: claimants and defendants will have greater flexibility in the resolution of damages claims.

View the Directive online http://ec.europa.eu/competition/antitrust/actionsdamages/documents.html

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.