Where can you go with your cartel claim after Brexit?

04 Jul 2016

London is often a jurisdiction of choice for claimants seeking the private enforcement of competition law for a number of reasons.  There is a well developed pool of legal, economic and financial/technical advisers.  The English courts have favourable rules on limitation and disclosure and a reputation for consistency and effectiveness in dealing with large and complex claims.  A number of judges have significant experience in trying such cases.  A network of claims funders and insurers provide financial support.

Competition cases, particularly damages actions relating to price fixing cartels, are often international in scope. EU rules on choice of court and law provide a predictable system that is well understood by lawyers and their clients in terms of where to sue and enables judgments in one member state to be automatically recognised and enforced across the single market.  Will Brexit mean that claimants are forced to seek remedies elsewhere?  The answer is not necessarily….

In the first place cartels that are likely to be the subject of Commission decisions are likely for quite some years to relate to the period while the UK was a member of the EU and therefore would not necessarily remove rights of those harmed by such cartels (including the right to bring any claims arising therefrom in the English courts).  For example so far in 2016 the Commission has issued a decision in relation to a cartel that ended in 2010.  Cartel decisions for the next two years will be covering cartels that occurred long before the date of any Brexit. We’ll be covering the issues around the status of Commission decisions in the UK post-Brexit in another post.

Secondly, if the Brussels Regulation no longer applies what impact will this have?  The UK could join arrangements between the EU and EEA/EFTA states (Lugano Convention).  The UK is still a signatory of the Brussels Convention which only is displaced due to membership of the EU.

If an EEA solution is adopted the rules will remain largely similar to the EU rules which currently apply.  Other fallbacks for a period at least could be the Brussels Convention and/or some more bespoke solution on these important but technical issues.  The common law and domestic legislation contains sophisticated conflicts rules which can still play a useful a role as they do now in such claims as the ultimate default set of rules in relation to third countries.  None of this necessarily means that litigants will be unable or unwilling to avail themselves of the English courts and the advantages they are perceived to have.

The jurisdictional basis of such claims are likely to be in the shorter term on the basis of EU law causes of action accrued during membership of the EU when such law was also English law (subject to whatever transitional arrangements are established).  In the longer term they may be based on EU law (even if technically ‘foreign’ law at this stage) in parallel with claims under the Competition Act 1998 for the UK aspects of any pan-european cartel. Such parallel UK claims may be standalone or follow on. Given that leniency applicants to the Commission  in pan-European cartels will also make leniency applications in third countries, which post Brexit would include the UK, parallel UK and EU decisions finding infringements in relation to the same cartel and binding as a matter of EU and UK law respectively is a possibility.

The position on choice of court and law and the ability to obtain efficient recognition and enforcement of judgments are all matters of key concern to businesses and consumers.  These important technical issues are ones to which this blog will be returning in the coming months.