The Government on 24 April published its consultation document Private actions in competition law: a consultation on options for reform which sets out various proposals to facilitate private-sector led enforcement of competition law in the UK.The Government's stated aims are to empower private parties (in particular SMEs and consumers) to enforce competition law through private court actions and to provide effective redress for loss caused by anti-competitive behaviour, whilst guarding against unmeritorious claims and the perceived "excesses" of anti-trust litigation in the US.
The Government's proposals to achieve these aims include far-reaching measures such as the establishment of an "opt-out" collective action for competition law breaches, a presumption of loss in cartel cases and the extension of the jurisdiction of the Competition Appeal Tribunal (CAT), although some possible further measures, such as introducing treble or punitive damages in competition cases, have been rejected. The proposals include:
- Creating an opt-out collective action regime for competition law claims, which would allow (subject to certification by the CAT) consumers and businesses to bring a case collectively in the CAT to obtain redress.
- Introducing a rebuttable presumption of loss in cartel cases which would presume that the cartel had increased prices by 20%.
- Ensuring private actions complement and do not undermine the public enforcement regime, in particular the leniency/whistle-blowing programme, by protecting certain leniency documents from disclosure in follow-on damages claims and by limiting a whistle-blower's liability for damages to the damage caused by it (i.e. amending the usual rules on the joint and several liability of cartelists).
- Establishing the CAT as a major venue for competition actions in the UK, to make it easier for businesses, especially SMEs, to challenge anti-competitive behaviour. This would include extension of the jurisdiction of the CAT to hear "stand-alone" competition claims and the introduction of a "light touch" cost-capped "fast track" procedure for SMEs to seek redress, in particular injunctive relief.
- Promoting Alternative Dispute Resolution (ADR) to ensure that the courts are the option of last resort, and empowering the OFT to impose redress regimes on undertakings infringing competition law.
If adopted, such proposals may have a significant impact on businesses, both increasing burdens and risks on undertakings, and also presenting potential opportunities for competition law-based actions against suppliers or competitors. A significant increase in private competition law claims is to be expected if the proposals are implemented, increasing further the need for companies to ensure they have effective competition law compliance processes in place.
A more detailed summary of the background to the proposals, and of the key measures put forward by the Government, is contained within the attached briefing. The Government's consultation closes on 24 July 2012.