No doubt piqued at the suggestion in my recent blog post that it might be a silent night for UK implementation of the Damages Directive, Government elves have re-doubled their efforts and have this week delivered UK competition lawyers an early Christmas present, in the form of a response to the consultation on the implementation of the Damages Directive. The consultation closed in March and so the response has been a long time coming, so much so that any question of early implementation has now been rendered a non-issue.
What does it actually say?
The main takeaway points from the response are:
- The Government will take a light touch approach and only make changes that are necessary to implement the Directive, leaving in place those provisions which already meet the requirements of the Directive. For example, no changes will be made to the limitation periods currently in place as these meet the requirements of the Directive.
- The Government will make clear in the implementing legislation which provisions are considered procedural (these will apply to proceedings commenced after the implementing legislation is put into force and may apply to infringements or harm before that date) and which are considered substantive (these will apply only where both the infringement and harm occurred after the implementing legislation is put into force).
- A unanimously positive response was received to the proposal that a single regime applies to both breaches of EU or domestic competition law. This will help to avoid confusion and uncertainty for potential litigants.
- Although limitation periods themselves will remain unchanged, the Government will amend national law to amend limitation provisions regarding the starting point for the limitation period. This will copy out the requirements of the Directive such that under the new regime, the limitation period will start to run once the anti-competitive behaviour has ceased and a claimant can reasonably be expected to know of that behaviour. The claimant should also know the identity of the infringer and have knowledge sufficient that he or she has suffered a loss as a result of the breach to bring a claim. In addition, there will be changes to allow for the suspension of the limitation period under certain circumstances.
- Changes will be made to the Competition Act 1998 and procedural court rules to implement specific rules on disclosure (including the prohibition on the use of leniency material, unless obtained lawfully from another source than a competition authority's file, a provision not currently available in national law, see National Grid).
- No substantial changes are proposed to implement rules on the passing on of overcharges as there is now clear case law (Sainsbury's v Mastercard) which establishes the rights of indirect purchasers and deals with the passing-on defence.
As noted in my previous post, the UK already has a well-developed damages regime and the response to the consultation and proposed light touch approach reflect that. There are few surprises in the response document.
As to the way forward, the published response does not set out precise proposals for the legislative amendments or confirm whether the implementation deadline of 27 December 2016 will be met.