Eu Consumers’ Actions For Damages: Quo Vadis?

By Sonsoles Prieto, European Union contest police practitioner, London*

By the halt of this year, the European Union Damages Directive (“the Directive”) - designed to encourage consumers as well as modest businesses to claim for damages against contest police offenders - must endure implemented past times the Member States.

Thirteen years ago, inwards 2003 Wouter P.J. Wils, fellow member of the Legal Service of the European Commission, when answering the enquiry whether individual enforcement of European Union Antitrust Law should endure encouraged, concluded that at that spot did non seem to endure a clear social necessitate for such action.  The overall perception seems to select changed significantly since.  However, nosotros are non yet fully adjusted to this novel challenge.

Background

Adopted inwards Dec 2014, the Directive requires all European Union Member States – as well as all EEA states – to “ensure that whatever natural or legal soul who has suffered harm caused past times an infringement of contest police is able to claim as well as to obtain total compensation for that harm”. Even if the Commission has already fined offending parties, every soul who has suffered losses every bit a resultant of contest violations i.e. beingness priced out of the market, is entitled to convey damages claims earlier national courts.

The European Union Member States are must implement the novel Directive past times Dec 2016.  National legislators must contain several eye-catching changes, such every bit files disclosure, flat actions, liability inwards solidum (not for leniency recipients), as well as an unfettered presumption that a cartel causes loss or passing-on effects.

The novel regulation arrives around parallel to U.S.A. Courts’ abatement of their extraterritorial jurisdiction inwards antitrust cases, every bit evidenced by Motorola Mobility v. AU Optronics.  The betoken has been sent:  U.S.A. anti-trust leadership is clearly over.

Class actions

Parallel to the Directive, the Commission adopted a Recommendation inviting the Member States to facilitate, past times the halt of July 2015, effective collective redress for victims of antitrust wrongdoers that facilitate compensatory relief.  If required, novel harmonised measures volition endure “mis en place” past times summertime 2017.

While opt-out damages actions are already a commonplace inwards the UK, cheers to Green Paper prioritises i of these divergent goals, adding unnecessary confusion to the already complex construction of European Union legislation.

Once again, the phantom menace of U.S.A. vogue flat actions excesses seems select Pb the European Union legislator to ban contingency fees, as well as to boundary damages to the harm caused.  The Commission choice for harm caused (including lost net turn a profit as well as pre-judgment involvement but non treble damages: Art. three of the Directive), too refrains from next the USA model.

Is the Commission scared of U.S.A. flat actions’ excesses?  Is at that spot unopen to other reason?  Could the wishing to keep a strong world enforcement endure behind all this?  Not everything is every bit bad inwards the U.S.A. organization as well as every bit adept inwards the European Union organization every bit the pic painted past times unopen to voices within the Commission.  Anti-trust/competition Law is inwards constant development, as well as the U.S.A. damages approach has been refined over the years.  By means of example, higher accuracy inwards the evaluation of standing as well as pleading requirements, mandatory causal link rules, as well as the latest amendments, which grant parties to straightaway review flat activeness certification orders, inwards fellowship to avoid unfair short town practices regardless of the merits of the claim.

Therefore, the Commission’s safeguards, such every bit protection of leniency programme as well as files disclosure, are aimed at protecting a world monopoly on contest enforcement over private, rather than trying to avoid U.S.A. flat actions’ excesses.  It is correct to create so, but, - as well as this is the major criticism of the Directive - it fails on its cement cartel case, where the Higher Regional Court of Dusseldorf dismissed the flat activeness every bit the proposed fiscal vehicle had insufficient funding, select shown the necessitate of a strong economical foundation.

Thus, international outsourcing entities offering solutions to victims of contest infringements select emerged inwards the European market: the Joint Venture between Buford’s and Hausfeld or, Buford’s biggest competitor, Bentham[16], who is financially supporting flat actions against Volkswagen AG as well as Tesco.  These examples are but the get-go of a predictable intense activity – run into the UK pensioners’ flat action seeking compensation from Pride Mobility Products for breaches of contest police – as well as volition endure potentially followed past times actions for damages on Libor submissions (Royal Bank of Scotland amidst other banks), FX manipulations, every bit good every bit against Melco and Hitachi car parts’ cartel.

Conclusion

Although it is recognised that the EU’s anti-trust destination is to prevent, curb or halt violations of contest rules, the principal destination has ever been to ensure consumer protection, without which, the whole orchestra is clearly deficient. The novel police will, inwards all likelihood, increase individual contest flat claims inwards Europe.  Rulings on these initial cases volition for certain pave the means as well as could convey novel cases to light.

Let us hope, however, that concessions granted past times the Commission to world enforcement – leniency or files disclosure amidst others – volition non forestall the Directive reaching its principal objective:  to motivate consumers as well as modest businesses to sue as well as to endure compensated.  Irrefutably, it is a alert against antitrust police offenders who volition run into higher negative fiscal consequences of potential infringements, fifty-fifty if deterrence is non the principal objective.

*Reblogged from the Anti-Trust as well as Competition Law blog

Barnard & Peers: chapter 17

Meme: past times Clemens Kaupa on pinterest

Share this post