The European Union (Actions for Damages for Infringements of Competition Law) Regulations 2017, SI 43/2017 (the “Regulations”), were published on 17 February 2017. The Regulations implement the Damages Directive 2014/104/EU (the “Damages Directive”) and apply both in relation to EU competition law and Irish competition law.
Claimants already had the right to bring damages claims for competition law infringements, and to rely on decisions of the European Commission or Irish courts as proof of infringement when bringing claims. The Regulations aim to further facilitate such claims, by introducing express provision for the following:
- a presumption that cartel infringements cause harm. This means that once there is a cartel finding (for example, by the European Commission), the courts will presume that this caused harm, unless this presumption is rebutted;
- co-infringers are jointly and severally liable for the harm caused, with the effect that each is bound to compensate for the harm in full. This means that claimants may claim from just one of the infringers and the infringer in question would then need to seek recovery from its co-infringers; and
- indirect as well as direct purchasers may claim. Indirect purchaser claimants bear the burden of proof of substantiating that overcharges were passed on, but benefit from presumption of this where there has been an infringement resulting in an overcharge to direct purchasers and the indirect purchaser purchased the overpriced goods or services. The passing-on defence is available (i.e. the argument that a purchaser did not suffer loss as a result of a cartel, because the overcharge was “passed-on” to further purchasers down the supply chain), but the burden of proof rests with the defendant.
However, the Regulations also limit certain claimant friendly aspects of the Irish competition law enforcement regime. For example:
- the Damages Directive provides for compensatory damages (i.e. compensation to place claimants in the position they would have been in had the infringement not been committed) but does not permit exemplary damages. Section 14 of the Competition Act 2002 provides for exemplary damages for breach of competition law. To give effect to the Damages Directive, the Regulations delete the relevant provisions of Section 14. Therefore, exemplary damages will no longer be available to claimants. This may not have much effect in practice however, as the courts rarely award exemplary damages; and
- disclosure in Ireland is typically very wide, and the Damages Directive may limit disclosure somewhat. In particular, the Regulations provide that disclosure must be proportionate and that when ordering disclosure, the court shall consider the scope and cost of disclosure, and whether the evidence sought contains confidential information, especially concerning any third parties.
The Regulations apply to infringements of competition law that occurred after 27 December 2016. This means that the first cases in Ireland which will rely on the Regulations are likely to be some years away.
For a more detailed analysis, please click here.
Contributed by Sheila Tormey