The European regime for follow-on damages claims should now be in full force – but has it been introduced on time?

The aim of the EU Damages Directive is to harmonise the rules on “follow-on damages” claims across the EU and, in doing so, make it easier for claimants to bring claims.  To date there has been wide variety in Member States’ willingness to facilitate follow-on claims.  Most have been brought in just a few jurisdictions – the UK (England & Wales), Germany and the Netherlands in particular – and the procedure has varied even amongst these few.

We have previously commented on the expected impact of the new rules on choice of jurisdiction, which will require significant changes to many national regimes in areas such as disclosure, limitation and the “pass-on” offence.

So, with the Directive due to be implemented in all Member States by 27 December 2016, what is the picture now?

Implementation so far

By the implementation date, most Member States had yet to implement the Directive into national law: only Denmark, Finland, Hungary, Luxembourg and Sweden had done so.

For some Member States, such as Germany and the UK, the failure to implement the Directive on time has less practical effect, as they already have rules which address most of the main features to be brought in by the Directive.

For example, in Germany decisions of the EU Commission, the German competition authority and national competition authorities of other EU member states already have binding effect on a German court in which a follow-on damages action is brought. Thus, German law already goes beyond what the Directive requires. Similarly, in the UK there is already an established and widely used damages regime, with concepts such as disclosure that are unlikely to change greatly once the Directive is implemented.

Despite this lack of complete implementation, though, most Member States have taken at least some steps towards implementation, and all the main jurisdictions are likely to be compliant in the near future.  Draft implementing laws have been presented in many of the Member States, including France, Germany, the Netherlands, Spain and the UK, and are progressing through legislatures, at varying paces.  Italy’s implementing legislation came into force on 14 January 2017.

Perhaps more interesting is the fact that several countries have taken the opportunity extend the scope of the Directive’s provisions, or to address other aspects of competition law that are considered in need of reform.

For example, several countries have decided that the new rules should apply to claims based on national competition authority decisions as well as EU decisions, which appears a sensible approach to ensure consistency.  Italy and Belgium have expressly included class actions within the new regime.  Germany will both expand its compulsory merger control regime and add possession of “big data” as a source of market power, at the same time as it implements the Directive.

Next steps

Whether or not it has been fully implemented in all Member States, by the end of 2017, the Directive is set to have introduced a significant cumulative change to national competition regimes across the EU.  This is likely to have the desired effect of increasing the risk profile for cartel offences taking place in the EU.

We will continue to monitor the Directive’s implementation as the year progresses and will report on its force and effect in future articles.