The Department of Business, Innovation and Skills yesterday launched a consultation on “Private actions in competition law”. The consultation paper is here and the BIS press release is here.
The consultation paper summarises the proposals as:
- Establish the Competition Appeal Tribunal (CAT) as a major venue for competition actions in the UK, to make it easier for businesses, especially SMEs, to challenge anti-competitive behaviour that is harming them.
This will include allowing cases to be brought even when they have not first been investigated by the OFT, allowing the CAT to grant injunctions and introducing a fast track procedure for SMEs that will allow simpler cases to be dealt with much more quickly and cheaply.
- Introduce an opt-out collective actions regime for competition law to allow consumers and businesses to collectively bring a case to obtain redress for their losses.
Breaches of competition law, such as price-fixing, often involve very large numbers of people each losing a small amount, meaning it is not cost-effective for any individual to bring a case to court. Allowing actions to be brought collectively would overcome this problem, allowing consumers and businesses to get back the money that is rightfully theirs – as well as acting as a further deterrent to anyone thinking of breaking the law.
- Promote Alternative Dispute Resolution (ADR) to ensure that the courts are the option of last resort.
While it is essential that wrong-doers can practically be taken to court, it is also right that businesses and consumers are encouraged to resolve their differences outside of court. The use of ADR can reduce costs and allow swifter resolution for all parties. We are therefore consulting on how to ensure ADR is the default option when bringing cases in the CAT and whether to grant the OFT a power to encourage companies found to have breached competition law to provide restitution to those they have wronged. Ultimately, if ADR is to become truly embedded it must be driven by the private and third sectors, not by Government.
- Ensure private actions complement the public enforcement regime. In particular, we are consulting on whether there are ways we can ensure that private actions do not discourage companies from whistle-blowing on cartels, which is a vital part of the OFT’s enforcement activity.
