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JULY 2013
Legal Expert Board
The draft Bill widens the jurisdiction of the Competition Appeal Tribunal (“CAT”). It provides for stand-alone actions for damages for an alleged infringement i.e. where no decision has been made by a relevant competition authority, it allows for the CAT to grant injunctions on par with the High Court and also gives parties leave to appeal on a point of law against a decision of the CAT to award damages or to grant an injunction in proceedings brought under s47A or s47B of the Competition Act 1998.
The new Bill has also aligned the limitation periods between the CAT and the higher courts of the United Kingdom (the High Court in England and Wales, the Court of Session in Scotland and the High Court in Northern Ireland), makes provision for the fast-tracking of certain claims and establishes the binding nature of final OFT/CMA decisions upon the CAT.
The other main addition that this Bill proposes is in relation to collective proceedings. It introduces a new opt-out regime for collective actions alongside the existing opt-in regime but prohibits the CAT from making an award of exemplary damages in both types of collective action.
The disclosure of leniency documentation is also currently a hot topic in the anti-trust community. Following the Pfleiderer decision by the ECJ in June 2011 and the National Grid case in the English Courts, the most recent development was the ECJ’s judgment in Donau Chemie released on 6 June this year. Here the ECJ held that EU countries can’t adopt laws that impose a blanket ban on the disclosure of cartel evidence (including whistleblower submissions) to victims of price fixing.
What has muddied the water slightly is the Commission’s recent release of a draft Directive on actions for damages (11
June 2013). In relation to disclosure the directive proposes to:
A. impose an absolute prohibition on national courts from ordering a party or third party in any action for damages to disclose (i) leniency corporate statements and (ii) settlement submissions; and
B. place a temporary prohibition on the disclosure of (i) documents that parties have specifically prepared for the purpose of public enforcement proceedings and (ii) those documents that the NCA has drawn up in relation to its proceedings; both types only being accessible after the NCA has closed its proceedings.
The draft directive also makes it clear that if a party to damages actions had been able to obtain access to those documents types in A, they would not be admissible as evidence in an action for damages and the second class of document would only be admissible after the NCA had closed its proceedings.
The Commission’s proposals on a damages claimant’s access to leniency documents have codified what was being played out in the courts of European nations. The proposals are a double edged sword in that whilst they allow disclosure they keep out – from the claimant’s perspective – the all important leniency material.
How does antitrust compliancy affect local and foreign businesses?
Let me answer this from the reverse perspective. Anticompetitive behavior sees companies entering into agreements to fix prices, share markets and customers and rig bids. The effects of this can be to artificially inflate the price of products, create high barriers to prevent the entry of potential new competitors and to inhibit innovation.
Contact: Jenna Corden
(PA to Anthony Maton and office Manager) Email: jcorden@hausfeldllp.com tel: 0207 665 5000
Website: www.hausfeldllp.co.uk
Cartel activity essentially enables less efficient companies to maintain a status quo on their particular market.
Compliance on the other hand would mean that competitors engage in business on a level playing field. For foreign companies this means that they have the opportunity to develop their business in new markets and for both local and foreign business it enables risks to be taken on new products and new ideas.
Compliance does come at a cost to both local and foreign business especially in relation to merger control. Before a management decision is taken in relation to a potential merger, experts such as solicitors and economists may have to be engaged to evaluate the compatibility of the merger with competition laws. Ryan Air provides a long running example which evidences compliance coming at quite a hefty price.
Ryan Air first notified the Commission in October 2006 of its wish to merge with Aer Lingus, the proposal was rejected. Ryan Air then appealed this decision but it was thrown out by the General Court. In 2009 Ryan Air again notified the Commission of the same merger but later withdrew this and for a third time last July Ryan Air tried again, but seven months after notifying the Commission the proposed merger was unanimously prohibited. LM
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