INTRODUCTION

The Spanish Ministry of Justice has recently published the Legislative proposal drafted by the Special Section of the General Codification Commission1 (“the Proposal”) on the implementation of Directive 2014/104/EU on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union (“the Directive”). The Directive was previously covered in our Legal Flash “Recent Legislative Developments From the European Union“.

Spain thus joins other EU Member States that have already published their own implementation proposals such as the Netherlands and Finland. Before the Proposal is enacted into law, it is necessary to initiate the corresponding parliamentary procedure. Accordingly, the Proposal first needs to be approved – in its current state or in amended form – by the Council of Ministers. Further, it will be necessary to gather the mandatory reports, such as the one elaborated by the General Council of the Judiciary (Consejo General del Poder Judicial). The deadline for implementation is 27 December 2016.

The Proposal opts for incorporating the substantive rules of the Directive into the current Act 15/2007, of 3 July, for the Defense of Competition (“ADC”; Ley de Defensa de la Competencia), while the procedural provisions will be incorporated in the Act 1/2000, of 7 January, on the Civil Procedure (Civil Procedure Rules, “CPR”; Ley de Enjuiciamiento Civil). Lastly, the Proposal foresees the inclusions of the definitions of the Directive as an additional provision of the implementing act.

SUBSTANTIVE PART – ACT FOR THE DEFENSE OF COMPETITION

The Proposal reproduces, in near-identical form, the substantive provisions of the Directive, except in a few instances where it has gone one step further:

  • Unfair Competition: The new regulation would apply not only to claims arising from illegal agreements between undertakings (Article 101 TFEU and Article 1 ADC) and abuse of dominance (Article 102 TFEU and Article 2 ADC), but also to claims for damages arising from the distortion of competition through acts involving unfair competition, as foreseen in Article 3 ADC, for which the ADC already envisages its own type of action for damages.
  • Parent liability: It is now expressly established that the parent company is responsible for the actions of its controlled subsidiaries. Even though this regime already existed in the administrative procedure (Article 61(2) ADC), the Proposal clarifies its extension to the civil procedure for the purposes of compensation.
  • Effect of national decisions: A final decision of a national competition authority (whether Spanish or another Member State's) or a competent jurisdictional body will be considered to establish irrefutably the existence of an infringement of competition law for these purposes and therefore the courts will be bound by such a finding. The Directive initially foresee the applicability of this effect only for the national decisions in the same Member State, while similar decisions of other Member States would, in principle, be prima facie evidence of an infringement.

PROCEDURAL PART – CIVIL PROCEDURE RULES (LEY DE ENJUICIAMIENTO CIVIL)

The Proposal - in its application of the rules of the Directive on disclosure - chooses to replace the current regulation on preliminary diligences (diligencias preliminares) and document exhibition for a completely new regulation in matters of access to the so-called “sources of evidence”. By exceeding the requests of the Directive, the Proposal would thus extend these mechanisms to “every claimant, every defendant or every subject who may claim”, not only to those actions for damages foreseen in the Directive.

If this Proposal is accepted as it now stands, it would incorporate into the CPR a new section on access to sources of evidence, which would include common provisions to all civil procedures, as well as specific provisions on the enforcement of intellectual and industrial property rights and actions for damages for infringements of competition law.

The most relevant elements of this innovative general system are, among others, (i) that the document disclosure requests may take place before the initiation of proceedings, during the preparation of the claim or afterwards, by the claimant or by the defendant, and requests may be directed at the other party or at third parties; (ii) it is possible to request whole categories of documents, limited by their nature, content or date, where it is not possible to further specify; (iii) a number of efficient measures to safeguard confidentiality are foreseen, including a list of examples; (iv) the requesting party bears the costs of any disclosure request, as well as any guarantee the court may decide to impose on the application of the party affected by the request; (v) the inclusion of a list of access measures to sources of evidence, which contains measures currently regulated under the preliminary diligence procedure; (vi) it is possible to request new measures in response to the result of the measures already undertaken - even though it is not developed in detail, the Proposal foresees that the competent tribunal must rule on any such additional measures; (vii) the lis pendens begins to run when the request for access to sources of evidence takes place in the event that this occurs before the action is brought; and (viii) in the event that such a request takes place before the action is brought, it is mandatory to bring the action following 20 days after the implementation of the measures on access to sources of evidence.

It is worth noting that the Proposal foresees the conducting of an oral hearing involving “all of the parties” to discuss the procedure for the adoption of the above mentioned measures. In the event that it is necessary to enforce such measures, the courts have the power to rule on the ability of the parties to access closed premises and domiciles, as well as the collection of documents and objects found therein.

The Proposal foresees negative consequences in the case of obstruction to the enforcement of such measures, which consequences may be requested to the court by the affected party. Among the possible measures, it is possible to draw negative inferences, to dismiss the claim or defense, to impose of coercive fines of up to 60,000 euros per day, and to order to pay the costs. Similar consequences are expected in case of breach of confidentiality obligations - extending to the parties, their representatives and legal counsel - with fines of up to 1 million euros, without prejudice to the criminal liability for disobeying the court order or the civil liability for the damages caused, to which the Proposal expressly refers. The specific provisions for actions for damages for infringement of competition law establish measures relating to access to evidence in such cases and the limits to the use of evidence obtained through access to the administrative file of a competition authority. These measures, which reflect the provisions of the Directive, may be applied with reference to these specific provisions, without prejudice to other access measures that may be brought under the common provisions.