If a company’s supplier or competitor abuses its dominant position or is a member of a cartel, its actions may inflict damage on other businesses. Until recently, claims for damages arising from these types of infringements have been more notional than real in Poland. This is set to change due to provisions of the Act of April 21, 2017, on claims for compensation for damage caused by competition law infringements, which enters into force on June 27, 2017.
The Act implements the Damages Directive (2014/104/EU), and was originally to have been finalized by December 27, 2016. The purpose of the Directive is to facilitate and harmonize the pursuit of compensation claims for violating antitrust laws in EU Member States.
In practice, it should now be easier for companies to obtain compensation if they experience problems as a result of cartels or other antitrust practices, while offenders will face a greater risk of successful damages claims.
Key features of the Act include:
- Limitation periods – there is a 5 year window for compensation claims arising out of competition law infringements (instead of the general limitation period regarding torts in the Civil Code which is 3 years). The clock stops for the duration of proceedings (including exploratory proceedings) conducted by the Chairperson of the Office for Competition and Consumer Protection – UOKiK, or other competition authorities. This suspension will cease only one year after the date of issue of a legally binding decision or termination of the proceedings by the authority in a different way.
- Legal presumptions – to facilitate compensation claims, the Act contains several rebuttable presumptions: (i) that all competition law infringements cause harm (the scope of this presumption is wider than required by the Directive, which presumes harm is caused only by hardcore infringements, i.e. cartels), (ii) that the infringer is culpable, and (iii) that overcharge is passed on to indirect purchasers.
- Joint and several liability of infringers – infringers will be jointly and severally liable for damage arising from competition law infringements. Certain limitations apply to SMEs and full immunity recipients benefiting from leniency programs provided for cartels.
- Simplified procedure for obtaining evidence – several simplifications for pursuing compensation claims in the form of provisions regarding disclosure of evidence held by the competition law infringers, third parties, UOKiK or other competition authorities. However, the disclosure must be proportionate and must not relate to leniency statements (regarding cartels only) submitted in leniency programs or settlement submissions (as per the definition in the new Act). Misuse of disclosed evidence will result in the court handling the claim disregarding that evidence. A non-discretionary fine of up to PLN 20,000 applies to a party requesting the disclosure of evidence in bad faith. A legally binding decision ordering disclosure of evidence constitutes an enforcement order and the obliged party may be subject to procedural consequences for non-compliance.
- Binding effect of UOKiK’s final decisions – a civil court processing a claim for compensation for damage arising from a competition law infringement will be bound by the findings of the UOKiK’s final decision and the final judgment of the appeal courts with respect to the establishment of the competition law infringement. The final decisions of the competition authorities (final judgments of the appeal courts) from other EU Member States may serve as factual presumptions of the occurrence of a competition law infringement.
- Interim provisions – the Act will apply towards private enforcement claims for damage that arise from infringements that occurred after the date the Act takes effect. An exception to this rule refers to procedural provisions (Chapter III of the Act – the civil procedure rules of pursuing damages claims arising from competition law infringements), i.e. the rules referring to inter alia: court jurisdiction, possibility of joining cases, disclosure of evidence and quantification of damages (except for the legal presumptions forming part of Chapter II of the Act). These provisions will apply to actions brought after the Act took effect, regardless of when the related competition law infringement actually occurred.
The above changes make it more attractive for you to identify potential claims against other market players. Preparing a defence strategy against private enforcement claims targeting your firm in advance will also prove crucial.