Litigation seeking damages from companies who have infringed competition law has been active in the US for several decades. In the English courts, by contrast, it has taken off only in the last decade. Companies who are the subject of regulatory infringement findings for cartel conduct or who face abuse of dominance allegations, now regularly find themselves in the English courts as defendants to claims for losses that flow from that conduct.
More boundaries set…
In the absence of case law in this new area of litigation, the full potential scope of these claims has been uncertain. But, over the last 12 months in particular, we have seen some significant case law and legislative developments. On the one hand, the boundaries have become more clearly defined – it has become harder for claimants to bring claims for worldwide damages in the English courts. Cases such as Iiyama and the economic torts judgment in Emerald (Air Cargo) have reduced the territorial scope of claims.
…But more frontiers opened too
On the other hand, new frontiers have been opened up with the recent introduction of opt-out collective actions as well as a fast-track procedure for competition law claims in the UK’s specialist court (the Competition Appeal Tribunal). The cost caps and speed of the new fast-track will encourage many claimants to bring litigation against large corporates. BLP has already acted on the defence of a fast-track action.
On the collective action front, the recently filed £14bn claim against MasterCard on behalf of all UK consumers has been front page news. This case is a huge test for the new collective action procedure. We will find out in the coming months if the court will agree to certify ‘all UK consumers’ as an opt-out class and allow the claim to proceed with the funding package that sits behind it. If it does so, the number of collective actions will rapidly increase.
There has also been further recent incentive for large corporate claimants. The Sainsbury’s v MasterCard judgment has stipulated – for the first time - a test that defendants should meet in order to seek to reduce the damages claimed by large corporate claimants. In a number of scenarios, defendants may now find it more challenging to establish that large corporate claimants have passed on losses to their own customers and so not suffered loss themselves. Encouraging for corporate claimants.
Brexit – but UK competition litigation is here to stay
And then of course, amidst all of these developments, we have had the Brexit vote. EEA membership, or something equivalent, should largely mean business as usual for competition litigation in the UK. In the event of full Brexit, the landscape could see greater future change, although only after a long tail on the current position.
The English court’s traditional strengths and experience will still make it an attractive forum. The policy appetite for the private enforcement of competition law in the UK remains strong and the innovation and potential of the new tools available to litigants here are market-leading, notably the opt-out collective action regime and the fast-track procedure. These are features that will keep the English courts busy in any Brexit scenario.
BLP acting for corporate claimants and defendants
The BLP Competition Litigation practice has been advising in this area throughout the last decade that it has taken off, and won industry awards for our work on the seminal National Grid (GIS) litigation which ran from 2008 to 2014.
Get in touch
If you would like to learn more about how we may be able to assist you in bringing or defending competition damages claims, please get in touch.