Historically, competition law has been a matter for public enforcement, with those who infringe it subject to penalty from regulators. However, there is an increasing impetus towards so-called "private enforcement" where the victims of anticompetitive behaviour sue for damages. In this regard, three developments are of particular interest:
- the introduction of follow-on actions; and
- current proposals to reform the damages regime from
- the UK Government; and
- the European Commission
The right to sue for damages for competition law infringement was established in the landmark claim of publican Bernie Crehan against Courage and Inntrepreneur, in which our head of Competition Law, Stephen Critchley represented Mr Crehan. However, it did not lead to a rush of claims, partly because of the difficulty in proving anticompetitive behaviour. The Crehan case ran from 1994 to 2006!
To cut through this difficulty, UK and European legislation in 2002 and 2003 introduced "follow-on" or "piggyback" claims in which the decisions of UK and European regulators are binding. So where regulators find companies have unlawfully engaged in anticompetitive collusion or have abused their dominance (see our Introduction to Competition Law), those who believe they had suffered as a result can sue - either before the Courts or the Competition Appeals Tribunal (the "CAT") - and, in that action, the unlawful behaviour is taken as given, so the proceedings can jump straight to the questions of:
- whether the behaviour caused loss to the claimant; and
- if so, how much.
The dawn of "follow-on" actions means anyone who believes themselves adversely affected by anticompetitive behaviour subject to a finding should consider whether the loss is large enough to merit a claim as, in one go, they can avoid the risk of the Court (or CAT) deciding there was no infringement and the enormous cost of proving that there was one.
Despite the comparative ease of follow-on actions, it is still not realistic to expect such actions by millions of consumers who have each lost, say, £10, so the 2002 legislation also enabled the government to empower so-called "super-complainants" like the consumer body Which? to bring follow-on actions on their behalf. If successful, compensation can be paid to any consumer with evidence like a shop receipt to show they were affected by the infringing behaviour.