The European Commission (the "Commission") yesterday published a Recommendation and draft Directive that will be of interest to any business that may be implicated in or the victim of a cartel in the EU.

The Recommendation invites all EU Member States to introduce collective actions for all types of mass harm (including but not limited to antitrust claims).  The draft Directive, which is specific to antitrust claims, seeks to protect leniency documents (as long-anticipated) but also introduces many climant-friendly measures such as increased disclosure and longer limitation periods.

Although the Commission could have gone even further, particularly in relation to collective actions, these proposals will still have a significant impact on businesses from 2015-16 if they are put into effect. We suspect they will not be, but those most directly affected will still no doubt wish to make their views known to legislators at the earliest opportunity.

Commission recommendation on common principles for collective redress mechanisms for claims based on violation of EU rights

Proposals for collective actions were first mooted by the Commission in 2005 in the context of antitrust claims but these have now been extended to apply to all types of mass harm involving a violation of EU rights.  The Commission has come up with a firm recommendation that such collective actions should be introduced in all Member States.

The proposals are intended to complement existing national collective action mechanisms where these already exist as well as certain existing narrow EU rights to collective redress. Much flexibility has been left to Member States but the Recommendation sets out certain common principles to be adopted including limitations on use of representative organisations, third party funding and contingency fees. The Commission strongly recommends that Member States should apply a "loser pays" rule for costs and not award punitive damages.

Perhaps the most interesting development - though not unexpected - is that the Commission has come out firmly against "opt-out" class actions (i.e. where one claimant claims on behalf of all those similarly situated except those who have chosen not to be involved). This is likely to be welcomed by potential defendants but the Recommendation is unlikely to have much effect on those Member States that have already introduced opt out actions or which are planning to introduce them.

It is, of course, highly significant that the Commission has now come out  in favour of collective actions, but a Recommendation does not create any binding obligations on Member States.  It remains to be seen whether Member States will introduce collective actions within two years as requested by the Commission or will just politely ignore the suggestions. The Commission has said it will review progress within four years, and may introduce further legislation at that point, but the Commission would not be able to do so in the face of opposition from Member States.

Draft Directive on antitrust damages claims

One part of the new draft Directive has been widely anticipated for a long time: legislative reversal of the Pfleiderer judgment permitting claimants sometimes to gain access to leniency submissions (see our article "Antitrust Litigation: Access to Documents Held by Regulatory Authorities", April 2012 - Winner of the Concurrences Award for Best Business Article on Anticompetitive Practices 2012).   Even so, though, the protection to be given to competition authority documents goes further than we expected.  Thus, there will be complete protection for:

  • corporate leniency statements, as expected, but also
  • settlement submissions.

Further, evidence solely obtained by a party through access to the file of a competition authority in exercise of its rights of defence will not be admissible in actions for damages except for the benefit of the party given access to file. This is intended to prevent defendants supplying access to file documents to claimants in return for more favourable settlements.

Finally, Member States will only be permitted to order the disclosure of the following categories of evidence after the relevant national or EU competition authority has closed its proceedings or taken a relevant decision:

  • information that was prepared by a natural or legal person specifically for the purpose of proceedings of a competition authority; and
  • information that was drawn up by a competition authority in the course of its proceedings.

The provisions above are intended to benefit competition authorities by limiting interference with investigations and strengthening leniency programmes. A further provision along the same lines is the proposal to exempt successful immunity applicants from joint and several liability unless claimants are unable to recover their damages from other defendants.

Apart from the provisions above, though, which will no doubt benefit defendants, the majority of the draft Directive is focused on the interests of claimants.

Claimant-friendly provisions include:

  • Most significantly for claimants in civil law jurisdictions, much greater rights of disclosure;
  • Longer limitation periods, perhaps six years after the final resolution of any infringement appeals (depending on how the "suspension of limitation periods" provision is interpreted);
  • Decisions of foreign national competition authorities must be treated as binding in any damages litigation;
  • There is to be a rebuttable presumption that a cartel gives rise to higher prices; and
  • Whilst the so-called passing on defence formally recognised (good for defendants), it is excluded where those who actually suffered the loss are unlikely to claim the burden of providing it always falls on the defendant.

This latter proposal is particularly surprising as it implies that claimants should be allowed to receive damages exceeding their loss in some circumstances despite the Commission's explicit opposition to punitive damages.

If formally adopted, the Directive would have to be implemented  by the Member States within two years from the date of adoption of the Proposed Directive.


It remains to be seen whether the new proposals will ever be implemented. The Commission has threatened legislation several times before in this area without actually acting, though it has never got as far as it has this time. The draft Directive will have to be approved by both the European Council and the European Parliament before it becomes law and there will no doubt be much lobbying by Member States and others. The provisions increasing disclosure, in particular, have previously been strongly opposed by civil law jurisdictions. With the next European Parliament elections in a year and a new Commission being appointed at around the same time, we think it unlikely there will be the political will to push through these proposals.

Nonetheless, the proposals are potentially significant and could lead to a major increase in claims if they are implemented, particularly when set alongside national initiatives such as those in the UK.  The UK Government recently confirmed in the Queen's Speech that it intends to introduce legislation that is likely to allow opt-out class actions for antitrust claims in the UK.

This legal alert keeps the clients of the firm “Baker & McKenzie” and other interested parties abreast of changes in legislation that may, to one degree or another, affect their activity or cater to their particular interests. The opinions and commentaries expressed in this legal alert are not legal opinions and cannot replace the necessity of receiving legal consultations or opinions in specific practical situations.