This setback for claimants comes at a time of change in the cartel litigation landscape in the UK, with legislators at both UK and EU level seeking to encourage victims of cartel conduct to issue proceedings to recover any loss suffered.
On 1 October 2015, the Consumer Rights Act entered into force bringing with it a number of new rules governing competition law claims and – significantly – the scope to bring opt-out collective (class) actions in certain circumstances. In addition, EU legislators have introduced a damages directive which is intended to facilitate compensation of victims of cartels across the EU.
The introduction of the new rules present opportunities for claimants. The most notable feature is the new procedure for representative litigants to apply to the specialist competition court - the Competition Appeal Tribunal - to bring claims on an “opt-out” basis on behalf of a “class” of claimants. This will - for the first time - allow a form of class action to be issued in the UK but only in respect of competition law infringement. For more detail on this regime, please see our article on the subject.
To date, cartel damages claims have been characterised by procedural delays resulting in claims taking several years to reach trial. Defendants have brought a plethora of procedural challenges seeking to dent the claimants’ resolve. This activity has, however, served to clarify the law in a number of areas including jurisdiction, stays of proceedings, disclosure of the Commission decision and the application of the French blocking statute and, in so doing, has cleared the way for more claimants to make cartel damages claims.
Although the new rules appear attractive to claimants and could signal an increase in competition law litigation, there remain uncertainties as to how the new rules will be applied including in particular, for collective actions, how the limitation rules will be applied and how the certification process will be interpreted. We expect defendants to continue to pursue technical procedural points in a bid to clarify the law and delay claims. However, as the law is clarified, we expect the English courts to see a significant and sustained increase in victims of cartels seeking to recover losses.
These recent developments cement the position of the UK as the forum of choice for cartel claims in the EU. Over the next few years it will be interesting to see how the Competition Appeal Tribunal will interpret the new rules. We expect parties to present authority from the US and Canada, two jurisdictions which have developed class action regimes, in order to influence how the rules should be interpreted in the UK.