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As part of the on-going reform of the UK competition litigation landscape, on 10 March 2014 the Competition Appeal Tribunal (CAT), which has become the new central forum for anti-trust cases, published draft rules for collective actions.
Collective actions are those brought by representative bodies on behalf of a class of claimants affected by, say, a cartel.
The rules set out a procedure to bolster a system of 'opt out' collective litigation.
Whereby, instead of representative actions being brought only on behalf of those members of a claimant class who volunteer to take part in it, only those who actively elect not to participate will be excluded from any assessment of damages or, if the matter is resolved prior to final judgment, in an approved settlement.
This vastly expands the potential level of exposure for cartelists and other competition law infringers as well as the incentive for representatives to come forward and instigate class actions.
In regards to how this system will work in practice, the following aspects of the draft rules seem particularly notable:
The new rules will put into practice a reformed approach to class litigation, which aims to encourage better representation of and participation by class claimants and better incentives for infringers to settle cases and provide voluntary redress to compensate for their wrongdoing.
It is also hoped that the potential scale of 'opt out' collective actions may provide a sterner deterrence to anti-competitive conduct, particularly cartels and so-called 'exclusionary' abuses by dominant firms, which will buttress public enforcement by the regulatory authorities (ie in the UK, from April 2014, the Competition and Markets Authority).
This article was written by Rory Ashmore.
For more information please contact Rory on +44 (0)20 7427 1031 or firstname.lastname@example.org