EU Directive provides incentive for actions for damages resulting from competition infringements

On 5 December 2014, Directive 2014/104/EU of the European Parliament and of the Council on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union (the “Directive”) was published. The Directive, which must be implemented by 27 December 2016, seeks to encourage the private enforcement of competition law by making it easier for those injured by competition infringements to bring actions for damages in order to ensure full compensation.

The Directive introduces several important innovations which, in the case of many Member-States, may require amendments to procedural and substantive rules of national law. The Directive is especially relevant in the context of the following issues: disclosure of evidence; binding effect of final decisions by national competition authorities; limitation periods; joint and several liability of the infringers; and a presumption of harm in the case of cartel infringements.

Regarding the disclosure of evidence, the national courts may order the disclosure by defendants or third parties, of specified items or categories of evidence that are relevant. However, disclosure must be limited to what is proportionate and in addition the claim for damages must be plausible. Furthermore, the categories of evidence must be defined as precisely and narrowly as possible, in order to avoid “fishing expeditions”.

Evidence included in the file of a competition authority is covered by special rules. In the case of certain types of documents, such as leniency statements and settlement submissions, disclosure is not permitted under any circumstances, which seeks to protect the effectiveness of the leniency regime as a means of uncovering and investigating cartels (although this protection does not extend to pre-existing documents submitted with a leniency statement, for instance, which may raise practical issues).

An important aspect of the Directive is that it confers a binding effect on final infringement decisions by national competition authorities – that is to say, before the national courts, an infringement of Articles 101 or 102 of the Treaty on the Functioning of the European Union (“TFEU”) is hereby deemed to be “irrefutably established”. In the case of decisions by competition authorities of other Member-States, these are to be accepted as prima facie evidence of the infringement.

Regarding the limitation period that applies to a claimant’s right to compensation, the Directive determines that this period does not begin to run (i) before the infringement has ceased and (ii) before the claimant knows (or can reasonably be expected to know) of the infringement. In addition, the limitation period for bringing an action for damages must not be less than 5 years and should be suspended during the course of the investigation by the competition authority (the suspension shall only end, at the earliest, one year after the proceedings are terminated).

Two other innovations introduced by the Directive stand out: on one hand, the introduction of joint and several liability by the infringers in cartel cases for the compensation in full of the harm caused (with the exception of immunity recipients, who benefit from a substantial limitation to their liability) and, on the other, a rebuttable presumption of harm in the event of cartel infringements (presumption which, understandably, does not extend to the quantification of the harm suffered).

These and other measures introduced by the Directive are certain to bring an added incentive to claimants to resort to actions for damages, seeking compensation for harm caused by infringements to the competition rules (Articles 101 and 102 TFEU), encouraging the private enforcement of competition law based on equivalent solutions regarding access to the courts in the various Member-States.