Encouraging private enforcement of the EU antitrust rules (by encouraging those harmed by cartels and other infringements to pursue actions for damages) has been on the EU Commission's agenda for almost a decade. Throughout this period, there has been a lot of discussion and debate about how to balance: (i) the desire to protect the immunity/leniency whistle-blowing programme; and (ii) the need for disclosure of incriminating material to enable private damages actions, all within the limits of EU competence. This week, we are updating on the Commission's private enforcement proposals.
In June, a draft Directive was issued: "certain rules governing actions for damages under national law for infringements of the competition law provisions of Member States and the EU". The goals of the draft Directive are as follows:
- Protect leniency procedures from disclosure to claimants in follow-on actions: proposal for EU-wide set of rules that will set minimum standards for access to evidence by potential claimants. In current form, the Directive would prevent national courts from ordering disclosure of: (i) information provided by parties under investigation to a national competition authority (NCA) or the Commission; and (ii) the Statement of Objections, whilst proceedings are ongoing, and also corporate leniency statements and settlement submissions prepared specifically for that purpose at any time (i.e. pre-existing documentation submitted in support of a leniency statement or settlement proposal would not be protected after proceedings had ended).
- Harmonization of various other procedural rules: the limitation period for bringing a damages claim should be at least five years from the date on which the potential claimant became aware of the infringement; where a number of companies have together infringed the rules, they will be jointly and severally liable for the entire damage caused (except that a company benefitting from immunity will only be liable for harm caused by it); the passing-on defence should be available to defendants; those who may have suffered harm indirectly as a result of an infringement should be entitled to sue if they can show liability and harm; there will be a rebuttable presumption that cartel infringements have caused harm to claimants; and national courts will have the power to estimate harm caused.
The issue of collective redress (i.e. class actions) has been omitted from the draft Directive. Concerns about facilitating US-style class actions mean that there is currently no consensus on what the proposal should be. The Commission did, however, issue a Recommendation in which it advocates an "opt-in" system, with no contingency fees and no punitive damages.
The draft Directive is currently before national governments and the European Parliament, both of which can propose changes. The Council, Commission and Parliament must all agree on the final version of the text for it to become law.
If you would like to discuss this issue, please do not hesitate to contact John Cassels.
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