The risk of being sued for damages for breach of competition law continues to increase and to spread internationally. In the EU, the European Commission is actively seeking to promote and encourage private litigation and intends to introduce legislation in 2011 to ‘set common standards and minimum requirements for national systems of antitrust damages actions to ensure that rights [to bring claims] are a reality for all’. It plans to adopt a framework for a common European approach to collective redress in spring 2011, providing a specific basis for damages actions by groups of claimants.
The number of competition damages claims being brought in the EU has increased significantly over the past year – the UK and Germany being the most popular fora for claims. However, claims are also being brought more frequently in other EU member states, including the Netherlands and Italy (where class actions became available in 2010). US plaintiff firms and others continue to encourage claimants to pursue competition damages claims (particularly cartel follow-on claims) aggressively before EU national courts.
It is also notable that cartel damages claims are being brought at an increasingly early stage, often before any final infringement decision has been taken. A recent example is the actions brought in England and the Netherlands for damages arising from the alleged air cargo cartel.
More frequent use of cartel settlement procedures could also accelerate private damages actions. The European Commission now has a negotiated settlement procedure for cartels (see section 3 below) and national competition authorities such as the UK Office of Fair Trading may be prepared to enter into settlement discussions in specific cases. These processes can, in certain circumstances, be used to allow parties to bring the investigation to an end at an earlier stage, in return for a reduced fine. One knock-on consequence of settling at an earlier stage, with no appeals against the resulting infringement decision, is that injured parties are likely to be able to progress follow-on damages claims more quickly before the courts.
In the US, private antitrust litigation – especially class action litigation – remains very common. In particular, private damages actions regularly proceed in parallel with criminal cartel investigations. Historically, US courts granted stays of private litigation at the request of the US government while a criminal grand jury was pending, but recently some courts have denied such requests, allowing the private cases to proceed.
In 2010, the US Congress extended until 2020 the Antitrust Criminal Penalty Enhancement and Reform Act. Under this act, a company that is granted amnesty from criminal prosecution for self-reporting a violation may also be shielded against treble damages (and joint and several liability) if it provides sufficient co-operation to plaintiffs in follow-on private litigation, giving private plaintiffs access to evidence.
Courts in the US have also been grappling with pleading and class certification standards. Despite what some consider increasingly stringent pleading standards, many actions nonetheless proceed past the initial motion to dismiss phase – including the air cargo litigation, one of the largest pending private damages actions. However, US courts seem to be scrutinising class action claims more closely. They have increasingly incorporated merits-based considerations into their evaluation of whether to grant class certification, a determination previously considered more of a procedural point, and parties can expect the trend of merits-based analyses to continue during the class certification phase of class actions.
Private damages actions are also being brought in jurisdictions where competition law has been more recently implemented. The Supreme Court of China announced in May 2010 that 10 cases had been lodged with Chinese courts under the Anti-monopoly Law, although no successful private actions have been reported to date. Private damages litigation is also an emerging trend in Brazil, where one of the first collective actions is now being pursued, and an initial case has been brought in India.