EU institutions reach political agreement on damages directive

Article

Posted by , , on

Summary: On 18 March 2014, representatives of the three main EU institutions (the European Commission (the “Commission”), the European Parliament, and the Council of Ministers) reached a political agreement on the final form of a Directive to facilitate damage claims in EU Member States by victims of infringements of EU competition law (the “Damages Directive”). This marks a major step towards the adoption of the Damages Directive in the coming months and follows months of talks between the institutions.

On 18 March 2014, representatives of the three main EU institutions (the European Commission (the 'Commission'), the European Parliament, and the Council of Ministers) reached a political agreement on the final form of a Directive to facilitate damage claims in EU Member States by victims of infringements of EU competition law (the 'Damages Directive'.  This marks a major step towards the adoption of the Damages Directive in the coming months and follows months of talks between the institutions.

The Damages Directive was proposed by the Commission in June 2013, following a number of failed attempts in the previous decade. The Commission has estimated that the total annual cost to consumers in the EU as a result of cartels ranges between €25 and €69bn. The Commission has therefore made it a key priority to facilitate the private enforcement of competition law and make it easier for victims of competition law infringements to bring claims.

The two major points of contention in the latter stages of the discussions were the access of claimants to evidence and the recognition of cartel decisions of authorities in one EU Member State by judges in other EU Member States.  According to initial reports, the position is as follows:

  • Access to evidence

    Claimants will not be able to access statements made by companies to the Commission in return for leniency or settlement submissions made under the EU’s cartel settlements notice.  However, as a compromise, it has reportedly been agreed that judges will be able to review the documents to ensure that they have correctly been identified as exempt from disclosure.

  • Recognition of cartel decisions

    It has also reportedly been agreed that national cartel decisions can be used as evidence in other EU Member States but they will not automatically bind judges.  This falls slightly shorter than the Commission’s original proposal, which would have meant that judges were bound by national cartel decisions from other Member States.

The Damages Directive also addresses issues such as the limitation period for bringing an action, whether damages can be claimed if they have effectively been passed on to customers of the claimant (the so-called “passing on” defence) and the quantification of harm.

Following the political agreement, the Damages Directive must now be formally adopted by the European Parliament and the Council, with the aim of the institutions that this should be completed prior to the European elections in May.  Although the completion of these formalities is by no means a certainty and there may yet be further twists and turns ahead, the political agreement marks a major step forward in the process and indicates that the Damages Directive may finally become a reality before long.  Once adopted, Member States will have two years to transpose the Damages Directive into national law, although there will likely be some immediate impact even on claims that proceed in the interim.

This site uses cookies to help us improve our services and your browsing experience. For further information about cookies, including about how to change your browser settings to no longer accept cookies, please view our privacy policy.