Reed Smith Client Alert

Authors: Edward S. Miller Marjorie C. Holmes

Type: Client Alerts

Member States’ ambassadors to the EU, known as the Committee of Permanent Representatives, have endorsed the agreement between the Council Presidency and representatives of the European Parliament on a proposed new EU Directive on rules governing actions for damages for infringements of competition law. The final text is expected to be voted through by the Parliament mid-April and could be formally adopted by the end of the year. Member States will then have two years to implement required national rules.

The Directive will facilitate claims by victims of violations of competition law by obliging member states to make changes in their laws in the following areas: 

  • The national courts will have power to order disclosure of evidence held by the opposing party or a third party. This will be subject to showing necessity, justifiable scope and proportionality, and also to legal privilege.
  • Leniency and settlement documents are exempt from disclosure, in order to ensure that incentives to cooperate with competition authorities (notably reduction in fines) are not prejudiced by information voluntarily disclosed being available to support civil litigation against a party who has cooperated with an authority.
  • Infringement decisions of one national authority will constitute rebuttable evidence of related infringements elsewhere.
  • Rules on limitation periods are clarified. Broadly, actions must be brought within five years of the infringement causing harm. This period is suspended for the duration of an investigation by an authority, and one year after its conclusion, and also during a maximum of two years during which the parties are pursuing settlement discussions. Joint and several liability applies for cartel members with some exceptions for SMEs and leniency applicants.
  • No punitive or triple damages.
  • “Passing on” defence is available to allow defendants to argue that although a customer may have paid a higher price due to, for example, a price fixing ring, the customer in fact suffered no loss because they succeeded in passing on the whole overcharge to a buyer from the customer down the line.
  • Where it is difficult to quantify harm, the court may estimate it.

 

 

Client Alert 2014-104