On 11 June 2013, the European Commission proposed a Directive and published a number of other documents to facilitate damage claims by victims of antitrust violations. The Directive will next be discussed in the European Parliament and the Council. If adopted by these institutions, Member States will have two years to implement its provisions in their legal systems. The Directive would harmonize national legislation falling within its ambit without altering the allocation of responsibilities between the Commission and the Member States. Awarding compensation is outside the field of competence of the Commission and the national competition authorities and within the domain of national courts and of civil law and procedure.
The proposal puts forward a number of measures, including the ones mentioned below, which will facilitate antitrust damages actions in Member States:
Final decisions of national competition authorities or review courts will constitute full proof before civil courts that the infringement occurred. According to the Commission, the possibility for the infringing undertaking to re-litigate the same issues in subsequent damages actions would be inefficient, cause legal uncertainty and lead to unnecessary costs for all parties involved and for the judiciary. The proposal establishes a rebuttable presumption that cartels cause harm. This will reduce the difficulties for victims quantifying the harm they have suffered. However, it is still open for infringers to prove that their cartel did not cause harm.
Clear rules on limitation periods are established. For example, from the moment an injured party has the possibility to discover it suffered harm from an infringement, it should have at least five years to bring a claim in a national court. This period is suspended if a competition authority begins proceedings, enabling victims to decide whether to wait until public proceedings come to an end before bringing a claim. Also, the limitation period does not even begin to run before the day on which a continuous or repeated infringement ceases.
Parties will have easier access to evidence. In particular, if a party needs specific documents that are in possession of other parties or third parties to prove a claim or a defence, it may obtain a court order for the disclosure of such documents. The national judge will have to ensure that disclosure orders are proportionate and that confidential information is duly protected. However, the Directive establishes common EU-wide limits to disclosure of certain evidence. Most importantly, it provides for absolute protection for leniency corporate statements and settlement submissions.
Victims should obtain compensation not only for the actual loss suffered (damnum emergens) but also for the loss of profit (lucrum cessans) plus interest.
The proposal clarifies the legal consequences of the passing on of harm. Sometimes direct customers of an infringer offset the increased price paid by charging higher prices from their own customers (indirect customers). This can result in reducing the compensation paid by the infringer to the direct customer by the amount the direct customer passed on to indirect customers. Because it is difficult for indirect customers to prove they have suffered harm by the pass-on, the proposal establishes a rebuttable presumption that it has occurred. It will be for the national judge to consider the exact amount of this price increase.
The proposal establishes joint and several liability for the whole harm caused. However, joint and several liability would not apply to an infringer who has obtained immunity from fines through leniency. As a main rule, such infringers should only be liable to compensate damages caused to their own direct or indirect purchasers/ providers. However, the limitation is not absolute: the recipient of immunity remains fully liable as a debtor of last-resort in case the injured parties are unable to obtain full compensation from the other infringers.
Also, rules to facilitate consensual out-of-court settlements will be put in place. These include, for example, the suspension of the limitation period for bringing an action for damages for the duration of the consensual dispute resolution process, and the impossibility for non-settling co-infringers to recover contribution from the settling co-infringer for the remaining claim.
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In addition to the 41-page Directive, accompanied by, inter alia, an Impact Assessment Report (88 pages) and an Executive Summary of the Report (10 pages), the Commission adopted yesterday a Communication (5 pages) as well as a Practical Guide (69 pages) on quantifying harm in actions for damages for competition law infringements to provide guidance to national courts and parties in damages actions. While the Communication and the Practical Guide will help in determining the amount of antitrust harm, they will not be legally binding.
Furthermore, also on 11 June 2013 and complementing the Directive, the Commission issued a Recommendation (10 pages) which calls on Member States to put in place, within two years at the latest, collective redress mechanisms (notably for consumer protection, competition, environment protection and financial services); and a related Communication (16 pages). However, the Directive leaves it to Member States whether or not to introduce collective redress actions in the context of private enforcement of competition law.
Originally published 12 June, 2013.
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