Many readers will now be familiar with the proposals for the reform of private competition claims launched by the Department for Business Innovation and Skills (‘DBIS’) in April 2012 (‘Private actions in competition law: A consultation on options for reform’). Published at the end of July 2012 when most people had better things to do, the OFT’s Response has generated less attention. It nonetheless provides a general endorsement of the DBIS proposals.
The OFT has noted that one of the key barriers to collective actions to date has been the low take up by claimants where the prospective recovery for each individual is modest. The OFT has therefore strongly supported the suggested introduction of an “opt-out” regime for collective actions, subject to certain caveats. First, the OFT recognises that appropriate safeguards need to be built into any scheme to dissuade abusive litigation. It recommends a strong court certification procedure to oversee the appointment of the representative body and retention in principle of the normal costs’ rules. Secondly, it is lukewarm about the DBIS proposal for all such actions to be heard in the CAT in the first instance. One senses that resource constraints in relation to the CAT are a driver of this reaction. But a proposed concurrent jurisdiction with the High Court is also accompanied by the suggested removal of the jurisdictional limitations on section 47A claims in the CAT. Few can doubt that such a proposal would be sensible. The Enron experience has successfully deterred claimants from commencing follow-on claims in the CAT. Thirdly, the OFT has cautiously welcomed the conferral of a power on the CAT to grant interim injunctions, but favours retaining in principle the need for a cross-undertaking in damages. Fourthly, the OFT has pointed out that expansion of the CAT’s jurisdiction will require synchronisation of applicable limitation periods in civil actions. Continue reading
