On the 22nd of July, 2017, the Law on Actions for Damages for Competition Law Infringements came into force in Croatia (the "Law"), implementing the EU Damages Directive. Even though the existing Competition Law provides for the possibility of private enforcement in a relatively general manner, private claims for damages suffered from antitrust breaches have been underdeveloped and rarely utilised in Croatia (and in the rest of the region).
The Law applies to any person who suffered damages from any competition law infringement, and such a person is entitled to full compensation, with statutory interest. Therefore, compensation can be claimed not only by the distributor, but also by the customer who suffered damages. The law fully implements the mechanisms stipulated by the Damages Directive, including:
- the pass-on presumption;
- objective liability; and,
- the presumption of cartel damages.
The procedural novelties introduced by the Law shall certainly challenge the Croatian judiciary. One of the most important procedural rules concerns the disclosure of evidence, which may be requested by either party, if it can reasonably indicate that the other party (or a third party) possesses such evidence. Prior to ordering the disclosure, the court will ask the parties whether they possess the evidence. Should they claim the contrary, the court may use other evidences for establishing such a fact. This may prolong the entire procedure and ultimately downsize the positive effects of the disclosure.
If the requesting party is the plaintiff, it also needs to show before the court that its claim is well-grounded. If the requested party does not comply, the court is expected to consider the facts to which such evidence relates as established. As these rules are a procedural novelty that deviates from the regular course of evidence in litigations, Croatian judges may find it challenging to follow them- especially, since they are mandatory and not optional.
Confidentiality is not a valid basis for non-disclosure, but the applicant can request from the court to protect sensitive information. Attorney/client privilege, as well as leniency statements and settlement submissions, are still considered protected and cannot be used as evidence for damage claims. While a party can seek the disclosure of evidence gathered by the competition authority, such evidence can only be disclosed following the conclusion of the case.
For the purpose of damages actions, a final infringement decision of the Croatian Competition Agency or the Croatian High Administrative Court is considered an irrefutable evidence of infringement and the decisions of a competition authority, or a court of another EU Member State, represent a rebuttable presumption of infringement. The statute of limitations is set at 5 years from the conclusion of the infringement, or the date when the aggrieved party could have been aware of the infringement, damages suffered and the identity of the infringer. In any case, the claim is ultimately time-barred after 15 years following the end of the infringement.
With the Law's adoption, Croatia is following the trend of increasing its attention towards the private enforcement of competition law. While there is undoubtedly still a lot of work ahead and a lot of experience is needed before the courts are comfortable with granting significant compensation, the new procedural tools should encourage compliance and help in sanctioning competition law infringers. More importantly, the new framework should help to provide a measure of justice to those hurt directly by anti-competitive arrangements. Now, it is up to the plaintiffs to step up and claim their due compensation.