UK Implementation of EU Antitrust Damages Directive: Significant Changes to Rules on Antitrust Damages Actions

In our Alert Memorandum first published on 9 January 2017, we consider the UK Regulations implementing the EU Antitrust Damages Directive and examine the practical impact of changes they will bring about on antitrust damages actions before the UK courts.

Although the deadline for implementation of the Directive was 27 December 2016, as of today, the Regulations still have not received formal Parliamentary approval.

The Directive and its UK implementation

The Directive aims to make it easier for victims of anti-competitive behaviour to seek compensation from infringing parties before national courts in all EU Member States, by introducing minimum rules for antitrust damages actions.

The UK already has well-established rules governing antitrust damages actions. The UK Government has therefore adopted a 'light touch' approach to implementing the Directive. Existing provisions that already meet (or exceed) the Directive’s requirements will be left in place, and changes will be made only where necessary.

The UK Regulations will apply to claims brought on or after the date they come into force. The majority of the provisions, however, will apply only where a claim relates to loss suffered on or after that date. For this reason, it may be some time before the practical application of many of the provisions are tested.

The most significant changes are summarised below.

1. Limitation periods

The Regulations make changes to the limitation periods for antitrust damages actions brought on or after the implementation date. In these cases, the limitation period will be suspended during any investigations by the European Commission or UK competition authority and during any consensual dispute resolution process.

As a result, companies engaging in anti-competitive behaviour in future will potentially be susceptible to damages actions for a much longer period than at present.

2. Presumption that cartels cause loss

The Regulations introduce a presumption that cartel infringements cause loss or damage. In future, if there is a finding of infringement, it will be for the defendant to rebut the presumption of loss in any damages action, although it will remain for the claimant to prove the amount of any loss.

3. Passing on of overcharges

The Regulations change the rules on 'passing on.'  In order to raise passing on as a defence, an infringer will bear the burden of proving that any overcharge has been passed on by a claimant using evidence that is normally in the hands of claimants or third parties.  Meanwhile, indirect purchasers will benefit from a presumption that any cartel overcharge suffered by direct purchasers will have been passed on to them.

4. Joint and several liability  

The Regulations will prevent co-defendants from bringing contribution claims against a defendant that has settled with the claimant.  This should make it more attractive for defendants in cartel damages actions to settle with the claimant on a bilateral basis.

5. Disclosure

Certain categories of information will become immune from disclosure, including leniency statements and settlement submissions submitted to a competition authority. Pre-existing information and contemporaneous evidence will remain subject to disclosure, even if they were produced to a competition authority in the context of leniency or settlement discussions.

This post comes to us from Cleary Gottlieb Steen & Hamilton and has first appeared here.