On 21 April 2017, the lower house of the Polish Parliament
("Sejm") adopted the Act on Private Enforcement of
Competition Law (the "Act"), which transposes Directive
2014/104/EU of the European Parliament and of the Council of
26 November 2014 (the so-called "Damages
Directive") into Polish law. Less than four weeks later the
Act was approved by the upper house of the Parliament
("Senat") and should be signed by the President by
9 June 2017. We discussed the highlights of the draft Act
in a Legal Insights article dated
28 March 2017. The purpose of the present article is to
provide more details about the adopted Act.
Although it was possible under general tort law rules to file a
civil lawsuit for damages caused by an infringement of competition
law, very few potential complainants decided to sue cartelists in
Poland. This was mainly due to the difficulty in proving the extent
of the damage and the causal link between it and the breach of
competition law, which is a prerequisite for obtaining
compensation.
The Act aims to make it easier to enforce compensation from a
company that has infringed competition rules. This objective will
be achieved thanks to the new rules on legal presumptions
favourable to claimants, specific principles for collecting
evidence or extended limitation periods, and others.
Below we set out the main rules introduced by the Act.
Presumption of damage
Under the Act it is presumed that an infringement of competition
law causes damage. This presumption is rebuttable and the defendant
has the right to contest it and prove otherwise in court.
Therefore, due to the introduction of the presumption of damage,
contrary to general tort law principles, the burden of proof in
this respect falls on the defendant. The scope of the presumption
is wider than under the Damages Directive, as it covers not only
cartels (horizontal agreements) but also vertical restraints and
abuse of dominant position.
Presumption of culpability
The Act also introduces a presumption of culpability of an
infringer. Like the presumption of damage, the presumption of
culpability can be challenged by the defendant in court. The burden
of proof is again shifted onto the alleged infringer, who will have
to prove lack of fault on its side in order to be released from
liability.
Pass-on presumption
The Act creates a pass-on presumption where if any infringement
results in an overcharge for a direct purchaser, it is presumed
that the overcharge was passed on to the indirect purchaser who
bought the products. As with previously mentioned presumptions, the
defendant may try to challenge it by proving that the overcharge
was not passed on or that the pass-on was limited.
An indirect purchaser can raise the pass-on presumption during a
lawsuit against the infringing company. However, the presumption
cannot be used by the defendant (infringer) in a case filed against
it by the direct purchaser. In such a situation the burden of proof
again lies with the defendant, and the infringer must therefore
prove in court that the overcharge passes on and the direct
purchaser is not entitled to damages or should be awarded only
limited damages.
Joint liability of infringers
The Act introduces specific regulations regarding joint liability
of two groups of infringers: (i) leniency applicants and (ii)
small- and medium-size enterprises ("SME").
Leniency applicants are jointly liable to their direct or indirect
purchasers or providers. In the case of other claimants, ie ones
not included in their chain of supply, leniency applicants are
jointly liable only if full compensation cannot be obtained from
the other infringers.
SMEs are jointly liable only towards their direct and indirect
purchasers if their market shares have not exceeded 5 % during
the infringement and their joint liability would irretrievably
jeopardise their economic viability or cause their assets to lose
all value. This exception does not apply to SMEs that played a
leading role in the infringement or previously infringed
competition rules.
Specific rules on collecting evidence
Under the new regulation, a claimant may request a court to order
a defendant or a third party to disclose the evidence they possess
(such as written documents or emails), if it may be crucial for the
court to issue a judgment in the case. Evidence obtained in this
way can be used only in private enforcement proceedings. An
obligation to disclose evidence can also be imposed on the Office
for Competition and Consumer Protection ("OCCP") if the
evidence cannot be provided to the court in any other way. This
rule does not apply to leniency statements and settlement
submissions made by the infringer. The purpose of the last
provision is to encourage cartelists to cooperate with the OCCP
during antimonopoly proceedings. The defendant may also submit a
request to order a disclosure of evidence subject to the same legal
restrictions as in the case of the claimants' request.
The decision of a court on disclosure of evidence may be appealed
to the court of second instance by the parties, a competition
authority or a third party which is obliged to disclose the
evidence.
In addition, the Act stipulates that final decisions of the OCCP
will be binding for courts in antitrust damages cases.
Nevertheless, the Act will also be applied to competition law
infringements with respect to which no proceedings were carried out
and no decision of the authority was issued.
Quantification of damage
Under the new Act, the court will be entitled to base its judgment
with respect to the quantification of damage on the guidelines
issued by the European Commission and/or on the advice of the OCCP
or another national competition authority having insight into the
case. However, the court's assessment likely will be based
above all on the opinion of economic experts and their arguments,
as in other EU countries where private enforcement lawsuits are
more common.
Limitation periods
The lawmakers decided to extend the general limitation period from
three to five years, although the limitation period does not
commence until the infringement has ended and will be suspended
upon the launch of an investigation by the OCCP or European
Commission. In practice, therefore, the limitation period may last
longer than just five years from the date on which the injured
entity or individual learned about the damage and the
infringer.
Entry into force
The Act will enter into force two weeks after its publication in
the Official Journal of Laws, which follows the President's
signature of the Act and will be applied to competition law
infringements occurring after this date. Only some procedural rules
(for example regarding disclosure of evidence or the binding effect
of the OCCP's final decisions) will be applied to infringements
that occurred before the entry into force of the Act.
Comment
The Act should give entities and consumers harmed by competition
law infringements opportunity and encouragement to sue infringing
companies more often. The introduction of legal presumptions
shifting the burden of proof onto the infringer and of specific
rules on the disclosure of evidence, which should increase the
chances of claimants succeeding in court, are steps in this
direction.
In practice, however, the success of private enforcement in Poland
will ultimately depend on the effectiveness of the OCCP as a public
enforcer.
On the other hand, the Act increases the legal and economic risk
for competition law infringers, who should know that a breach of
antitrust rules may lead to heavy fines by the OCCP or European
Commission as well as damages for harmed companies and individuals
awarded by civil courts. Having effective competition compliance
programmes in place is thus even more important than ever.
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.