Professional Documents
Culture Documents
Briefing note
January 2013
Key issues
New powers for the Competition Appeal Tribunal A new right of collective action Promoting ADR to save time and cost Ensuring private actions complement the public enforcement regime
plans have several safeguards against the perceived disadvantages of US actions. The CAT will be required to certify whether a collective action brought under the new regime should proceed on an opt-in or optout basis. The underlying claimants in such a case will be able to be either consumers or businesses, or a combination of the two. Claims will be able to be brought either by claimants or by genuine representatives of claimants such as trade associations or consumer associations but not by law firms, third party funders or special-purpose vehicles. There will also be safeguards including a process of judicial certification (including a preliminary merits test), the opt-out aspect of a claim only applying to UK-domiciled claimants, a prohibition on treble or exemplary damages (one of the mostcriticised aspects of US class actions), the application of the loser-pays rule in the assessment of costs and expenses (also unknown in the US, where class action defendants often face frivolous claims from claimants who have only their own costs to bear), a prohibition on contingency fees and the payment of any unclaimed sums to the Access to Justice Foundation. Additionally, any opt-out settlement will have to be judicially approved. There is also to be a new opt-out collective settlement regime for competition law in the CAT, similar to the system in the Netherlands, to allow businesses to quickly and easily settle cases on a voluntary basis.
Authors
Elizabeth Morony Partner, London T: +44 20 7006 8128 E: elizabeth.morony @cliffordchance.com encouraged by the courts to consider it early in proceedings. The Government has decided to strongly encourage ADR in competition cases, but has stopped short of making it mandatory. It will align the CAT rules governing formal settlement offers (Calderbank letters) with those of the High Court. As noted in respect of collective actions, there will be a new opt-out collective settlement regime for competition claims in the CAT. Additionally, the OFT will be able, when a company has been found to have infringed competition law, to certify a voluntary redress scheme, but not to impose one. Those who offer a redress scheme could qualify for a possible reduction of fine, in accordance with the OFT's current guidance. The Government decided against introducing a pre-action protocol in competition cases, at least partly because many respondents to the consultation had raised concerns about an infringing party being put on notice of potential legal proceedings by receipt of a pre-action protocol and then starting its own proceedings in another European state. Under
Luke Tolaini Partner, London T: +44 20 7006 4666 E: luke.tolaini @cliffordchance.com European law, once a case has been started in one member state, it cannot be started in another one.
This publication does not necessarily deal with every important topic or cover every aspect of the topics with which it deals. It is not designed to provide legal or other advice.
Clifford Chance, 10 Upper Bank Street, London, E14 5JJ Clifford Chance 2013 Clifford Chance LLP is a limited liability partnership registered in England and Wales under number OC323571 Registered office: 10 Upper Bank Street, London, E14 5JJ We use the word 'partner' to refer to a member of Clifford Chance LLP, or an employee or consultant with equivalent standing and qualifications If you do not wish to receive further information from Clifford Chance about events or legal developments which we believe may be of interest to you, please either send an email to nomorecontact@cliffordchance.com or by post at Clifford Chance LLP, 10 Upper Bank Street, Canary Wharf, London E14 5JJ
www.cliffordchance.com
Abu Dhabi Amsterdam Bangkok Barcelona Beijing Brussels Bucharest Casablanca Doha Dubai Dsseldorf Frankfurt Hong Kong Istanbul Kyiv London Luxembourg Madrid Milan Moscow Munich New York Paris Perth Prague Riyadh* Rome So Paulo Seoul Shanghai Singapore Sydney Tokyo Warsaw Washington, D.C.
*Clifford Chance has a co-operation agreement with Al-Jadaan & Partners Law Firm in Riyadh.