Competition litigation practice

Competition is the driving force behind a thriving economy. It not only generates employment opportunities but also enhances the overall well-being of society. By fostering competition, businesses are compelled to optimize their resources and explore innovative approaches to attract customers and expand their operations.

Moreover, competition plays a crucial role in safeguarding consumer interests. It ensures that prices remain affordable, while the quality and variety of goods and services remain high. Additionally, it promotes a level playing field among businesses, preventing any unfair advantages.

In a market characterized by fair and robust competition, businesses are compelled to meet consumer demands by offering desirable products at competitive prices. Ultimately, this empowers consumers, as they have the ability to dictate market trends and make informed choices.

Why competition law matters

Companies do not always play by the rules.

When businesses decide to collude instead of competing, it prevents customers from receiving a fair deal. Cartels harm consumers and disturb economic efficiency.

Companies with significant market power can raise prices above the competitive level to sell their products, even if the quality is subpar. Abuse of dominance often involves imposing unfair prices or other unfair trading conditions.

To prevent violations of competition laws, national authorities have the authority to levy fines on offenders. This is known as public enforcement. In addition, there is also private enforcement, where private parties can pursue legal action.

The purpose behind the establishment of the new collective proceedings regime was to facilitate access to justice for individuals who have experienced losses due to violations of competition law, particularly those who might refrain from pursuing individual claims due to the potential costs of litigation surpassing the value of their losses. Once claimants can demonstrate a legitimate issue for trial and a loss that is more than nominal, the courts are obligated to uphold their right to proceed to trial.

The Competition Appeal Tribunal

Since the enactment of the Consumer Rights Act 2015, there has been a notable rise in the number of collective proceedings brought in the Competition Appeal Tribunal (CAT), based on theories of harm under Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU) and their corresponding provisions in the UK, specifically Chapters 1 and 2 of the Competition Act 1998.

Section 47B of the Competition Act 1998 allows for the consolidation of multiple claims for damages or relief arising from violations of competition law, initiated by an individual intending to serve as the class representative (PCR). Such proceedings can only begin following the certification of the claim through a Collective Proceedings Order (CPO) issued by the CAT.

The certification process is not about – and does not involve – a merits test. The merits of the case will be assessed solely during the trial phase, with the exception of motions for summary judgment or strike-out.

An important requirement that has emerged in recent cases, which frequently proves crucial for the success of a CPO application, is the necessity for the PCR to provide a “blueprint to trial.” This blueprint entails a methodology that outlines the issues to be addressed during the trial, including breach of duty, causation, proof of loss, and quantum, along with the proposed methods for resolving these issues.

Legal claims may be initiated on either an opt-in or opt-out basis. In the opt-in scenario, class members are required to take affirmative steps to participate in the proceedings. Conversely, in the opt-out scenario, class members are automatically included unless they choose to withdraw, and the proceedings occur without their active participation or, in many instances, even their awareness.

A notable characteristic of the collective proceedings framework is the non-application of the compensatory principle. Compensation is granted on a collective basis, eliminating the necessity for an individual evaluation of each claimant’s losses.

The rising frequency of newly commenced collective proceedings in recent years reflects the generally positive stance of the Competition Appeal Tribunal, the UK Supreme Court, and the Court of Appeal, regarding collective actions in competition damages cases.