On 29 January 2013, the UK Government’s Department for Business, Innovation & Skills announced new proposals designed to improve the ability for consumers and businesses to bring collective damages claims against competition law infringers.
The new proposals contain novelties that should make it easier for consumers and businesses to claim damages for loss arising out of competition infringements. While this may increase the financial exposure of the infringers, it could also introduce a greater degree of clarity as to the procedural rights of both sides, and provide infringers with the possibility to settle matters quickly and with limited publicity.
The UK Government’s new proposals, which were preceded by extensive public consultation, would
- Extend the jurisdiction of the Competition Appeal Tribunal (the CAT) so as to include “stand-alone” claims and the ability to grant injunctions
- Introduce an “opt-out” form of collective action for competition damages claims, subject to a number of safeguards
- Promote the use of Alternative Dispute Resolution (ADR) in competition damages actions
- Ensure that any developments in the area of private damages actions complements the public enforcement regime.
An Increased Role for The Specialist CAT
The new proposals seek to make the CAT—which is a specialist tribunal—the jurisdiction of choice for all private damages actions in the United Kingdom.
First, the CAT would be given jurisdiction to try stand-alone claims in addition to its current jurisdiction to try “follow-on” claims. Follow-on claims are those made after the European Commission or the UK Competition Authority has determined that an infringement exists, and so the only issues before the CAT are those of causation and the amount of damages to be awarded. In stand-alone claims, on the other hand, the CAT itself will have to determine whether an infringement exists. At present, stand-alone claims can only be brought before the High Court in England and Wales (or the Court of Session in Scotland).
Second, the limitation period for bringing stand-alone and follow-on claims before the CAT would be aligned with that for the High Court in England and Wales, namely six years, and that for the Court of Session in Scotland, namely five years.
Third, the CAT would be empowered to grant injunctions in proceedings in England and Wales and Northern Ireland, but not interdicts in Scottish cases.
Fourth, a fast track procedure would be instituted for simple cases before the CAT, with a cap on costs set on a case-by-case basis by the CAT at its discretion.
Finally, where appropriate, it would be possible to transfer cases from the High Court or the County Court in England and Wales to the CAT and from the CAT to the High Court. In Scottish cases such transfers would be possible between the corresponding Scottish courts and the CAT.
The Introduction of an Opt-Out Collective Actions Regime
The new proposals would create a new form of collective action—an opt-out competition damages action—designed to avoid the [...]