On 26 March 2014, the Committee of Permanent Representatives endorsed an agreement between the Presidency of the Competitiveness Council and European Parliament representatives on the proposed directive on actions for damages for competition law infringements ("New Draft Directive"). The analysis below highlights important provisions and compares them to the previous draft published on 11 June 2013 ("Commission draft"). (See Stibbe's article.)
Discovery: Both leniency statements and settlement submissions remain undiscoverable in the New Draft Directive ("black list"). However, the possibility is still left open to contest whether a document or part thereof is in the black list. The information that is found by the competent national court to fall outside the black list may be disclosed subject to an assessment. Disclosure will hinge on an analysis of the document's relevance, proportionality, and the valid interest of the undertakings, with the party against discovery having a right to be heard. Noteworthy is that the New Draft Directive adds that an interest in avoiding action for damages is not an interest that warrants protection.
As with the Commission draft, the New Draft Directive contains provisions for the disclosure of certain kinds of evidence after the competition authority has closed its proceedings ("grey list"), including documentation prepared in the context of the proceedings. Unlike the Commission draft, however, the New Draft Directive has a somewhat reduced protection by allowing "withdrawn" settlement submissions to be discoverable, the repercussions of which are yet unknown. The New Draft Directive could mean that communications exchanged in the context of settlement discussions that do not lead to an actual settlement, could become discoverable. If so, it might undermine the parties' willingness to engage in settlement discussions.
Joint and several liability: Under the New Draft Directive, infringers can be held jointly and severally liable for the harm the claimant has suffered. In addition, the New Draft Directives provides for national law to decide how that liability is divided amongst cartelists, who are entitled to file cross claims for contribution against each other.
The New Draft Directive also allows for an affirmative defense for small and medium enterprises against joint and several liability. That is, cartelists who have less than 5% of the relevant market at any time during the infringement and who would risk economic viability, may only be liable to their direct and indirect purchasers. This defense would be unavailable if the undertaking led the infringement or coerced others to participate, or has been previously found to have infringed competition law. This provision may result in claimants having to cast a wide net in order to get relief.
Immunity recipients remain in the New Draft Directive immune for joint and several liability, unless they are the debtor of last resort.
Passing-on: Whether direct or indirect purchasers, the New Draft Directive allows for a right to full compensation. The burden to prove passing-on of overcharge rests with the indirect-purchaser who raises the claim. The Commission will issue guidelines in that regard.
Probative value of national decisions: Instead of giving full effect to the decision of a national competition authority as envisioned in the Commission draft, the New Draft Directive provides for national infringement decisions to be taken as prima facie evidence that will be examined according to the laws of the competent jurisdiction.
Time limit: Under the New Draft Directive, national legislations should provide claimants with a period of at least five years to bring their claims. The limitation period will not begin to run before the infringement has ceased and the claimant knows or can reasonably be expected to know: the behaviour and that it constitutes an infringement, that it caused harm to him and the identity of the infringer. The Commission draft's provision of suspension of limitation periods during consensual dispute resolution remains in the New Draft Directive.
Quantification of harm: The New Draft Directive empowers national competition authorities to assist in estimating the harm suffered. The New Draft Directive retains the rebuttable presumption that harm was caused by the infringer's actions but it does not establish double presumption. That is, each individual claimant still has to show that the harm was caused to him.
The European Parliament and the Council have yet to formalize the agreement. Member States will have two years to transpose the New Draft Directive after it enters into force.