On 26 March 2014, the Committee of Permanent Representatives, a group composed of representatives from the Member States, accepted amendments to the proposed competition damages Directive made by the European Parliament and the Council Presidency.
These amendments are important as the aim of the Directive is to help harmonize the European competition litigation landscape, moving towards a common approach throughout the Member States.
By way of background and as previously reported, the aim of the Directive is to encourage private litigants to claim compensation by suing companies who have engaged in unlawful anti-competitive behaviour. This litigation can be started either on a ‘stand-alone’ basis (meaning the companies suing will have to prove both liability as well as quantum of damages) or on a ‘follow-on’ basis (meaning liability has already been established by a regulator’s decision and companies merely have to prove causation and quantum).
The procedural mechanisms and ability to recover damages in competition litigation varies wildly between the EU Member States and thus the Directive seeks to approximate key claimant’s rights in litigation to make it easier to claim compensation and hold perpetrators to account.
The new wording amends the original draft Directive and reflects consensus and compromise over its proposals. Below are three of the main changes:
1. Findings of Infringement: In the original wording, the findings of any Member State’s competition authority could be used in the courts of another Member State as evidence of wrongdoing, effectively sparing claimants from having to re-prove liability. This has been watered down, presumably to allow Courts flexibility by amending the wording so that findings of liability from other another Member State’s regulators are now only prima facie evidence of liability, a presumption that can be rebutted.
2. Disclosure of Leniency Documents: Due to objections from the European Parliament, documents disclosed under leniency applications will not enjoy an unqualified protection. The original intention was to continue to protect these documents to safeguard the incentive and integrity of whistle-blower and settlement procedures. Instead, leniency corporate statements and settlement submissions will be protected as ‘black list’ documents but their suitability to be considered so may be examined by the Court with the assistance of the competition authorities. As black list documents, they will enjoy protection from disclosure in court proceedings and will only be used in leniency and settlement programmes. Other evidence may fall into a ‘grey list’ where, whilst not immediately disclosable, once the competition authority has closed its proceedings, this evidence may be disclosed and used in Court.
3. Disclosure/Discovery: The disclosure regimes across Europe vary. The original Directive wanted to create a general right to the disclosure of evidence. The new text strengthens this right with the qualification that the interest against self incrimination is not a defence to disclosing. However, there is a new right for parties to be heard in Court before disclosure orders are made and a stance against parties fishing for documents with the disclosure needing to be proportionate. Member States are however permitted to allow wider disclosure regimes if they wish to do so.
The next step is for the new language to be formally approved by the Council and the European Parliament with an expected adoption of the Directive within the next two months. Once adopted, EU Member States will have up to two years to adopt the Directive into their national legislation.
The amended wording of the Directive can be found here.