Competition class actions suffer setback as EU shuns directive

Jose Manuel Barroso

Jose Manuel Barroso

A first draft of the private competition damages law was due to go before the European Commission this week, but was unexpectedly taken off the agenda on Friday (2 October).

According to reports last week, the controversial document was withdrawn following an intervention by European Commission president Jose Manuel Barroso.

The proposed directive included several measures designed to encourage consumers to pursue damages against companies that fix prices or abuse market position.

Included in the draft was the controversial “opt-out” clause, which allows class actions to be launched on behalf of a single claimant, who represents an entire group.

Those affected by anti-competitive behaviour would automatically be included in the action, unless they opted out.

Clifford Chance competition partner Luke Tolaini said: “It was always going to be a controversial directive.

“It appears to have been pulled in order to get more agreement from member states.”

It is understood that there was concern among some Members of European Parliament (MEPs) about the affect on businesses of a rise in costly anti-trust actions.

It is not yet clear whether the draft legislation will re-emerge.

Under current rules it is difficult to pursue class actions in the UK. Consumer group Which? is the only body with the right to bring collective actions, but the high cost and relatively small reward have meant that few cases have been brought.