Private Litigation in England and Wales
Renato Nazzini, May 28, 2010
The United Kingdom has been at the forefront of developments of private enforcement of competition law. However, as I discussed in a previous article co-authored with Ali Nikpay,this jurisdiction has also often adopted a cautious approach to measures aimed at facilitating litigation in this field, for fear of fostering spurious claims and a litigation culture that would be socially harmful and unfair to defendants.This article updates that article as to the current status of private litigation in England and Wales.
There is no doubt that England and Wales is well placed to be a forum for effective resolution of competition law disputes. First, English courts have adopted an expansive approach to territorial jurisdiction. In Provimi Ltd v Aventis Animal Nutrition SA, the court dismissed applications for striking out and summary judgment in actions brought by a German company against English defendants where the claimant had had no contractual dealings whatsoever with the English companies. However, the English companies were part of the same corporate group and formed the same "undertaking" as the German companies, from which the claimant had purchased goods at the allegedly higher cartel price. Higher prices in Germany would not have been tenable if the cartel had not been implemented on a supra-national scale. Therefore, the conduct of the English defendants had contributed to causing a loss to the claimant.
Second, almost uniquely in Europe, English law recognizes the principle that, in order to do justice between the parties, all relevant evidence must be placed before the court. Therefore, the parties are under a continuing duty to disclose all documents which are or have been in their possession and that either support their case, or support the other party's case, or undermine the disclosing party's case. Disclosure is essential in competition litigation. In civil law countries, the opposite general principle applies: A party does not have a duty to disclose evidence that supports the other party's case or undermines his own case. This principle has, of course, exceptions, particularly where the other party is able to identify a document with sufficient precision and applies to the court for specific disclosure of that document.
Third, competition cases in England and Wales must be issued in or transferred to the Chancery division of the High Court, where a small number of senior judges will be able to build significant experience in competition cases. The same judges can also sit as chairman of the Competition Appeal Tribunal ("CAT"), which, among other things, hears appeals against the decisions of the Office of Fair Trading ("OFT") or the regulators as to whether the national or European competition rules have been infringed. Furthermore, the CAT has jurisdiction to hear claims for damages or other sum of money when the infringement has already been established in a decision by the OFT, a regulator, or the European Commission (so-called "follow-on claims").
There are two main features of the English system that, however, are liable to constitute a significant obstacle to effective redress in competition cases: costs and the lack of a clearly established and effective procedure for collective claims.