Delivering Competition Damages in the UK

Abstract

This paper examines the system for delivering compensation for breach of competition law that would apply to claims if the proposals contained in 2012 consultation by the U.K. government came into effect. It examines how the system would operate in practice, and how an individual or collective claim would be dealt with. The position involves incorporating various innovative techniques from the three pillars of public enforcement, and private enforcement and ADR, each of which individually constitutes a significant reform, into a sophisticated pre-existing system. The result is complex and untested, not least because the details of every one of the major individual techniques are yet to be defined. The paper examines crucial influence that the incentives and powers (carrots, nudges and sticks) that would apply in each situation would have on how a claim is processed, or which impede it. It finds that the ADR and regulatory techniques can offer transformative solutions in delivering compensation. Whilst a private class action could operate in follow-on mass cases, it would be unnecessarily slow and costly compared with intelligent use of the ADR and regulatory alternatives. Significant concerns are identified over whether a class action would be effective in stand-alone or mass consumer cases. Accordingly, it suggests that policymakers should re-examine priorities as between private enforcement and other options.