DBIST consultation on competition collective actions and investigations: Bristows' response

Bristows was pleased to respond to the recent DBIST consultation into the future of competition redress and enforcement in the UK. Drawing on our extensive experience of competition litigation in the Competition Appeal Tribunal (CAT) and other fora and of Competition and Markets Authority (CMA) investigations, we set out our views on the questions which may shape how competition proceedings and investigations are dealt with in the future.

Some highlights of our response are below:

• Refining collective actions, not reinventing them. We broadly supported efforts to ensure that weak or unsuitable collective actions can be identified earlier, particularly through greater scrutiny of cost-benefit and aggregate damages issues at certification. However, we cautioned against reforms that simply create new uncertainty and trigger years of satellite litigation over the meaning of revised certification tests - ultimately such disputes are in the interests of neither claimants nor defendants. 
• Funding options could be relaxed, provided safeguards are in place. We observed that permitting damages-based agreements could increase funding options and make smaller claims viable, but sufficient safeguards must be used, including disclosure of terms of DBAs and ATE insurance as part of the certification process. Better disclosure of funding arrangements should be mandated even for non-collective actions. 
• Efficiency must not come at the expense of fairness. We supported practical reforms aimed at improving cost predictability and settlement prospects. At the same time, we questioned whether mandatory ADR and penalties for failing to engage in mediation would work well in competition cases, particularly where liability the outcome may affect a defendant's future business conduct. Mediation is often only effective at a late stage, once the views of the experts are known: any mandated mediation after expert reports will require additional time to be built into trial timetables. 
• A more disciplined CAT process would reduce unnecessary cost. We suggested that there is scope to formalise certain aspects of CAT procedure, for example, the process for making applications. Aligning more closely with established High Court practices could reduce unnecessary hearings, improve predictability and lower litigation costs without affecting access to justice. 
• Redress schemes deserve greater attention. One of the more significant proposals concerns the wider use of redress schemes. We suggested that the current framework could be simplified considerably, for example through the use of monitoring trustees. We also highlighted the need to ensure that businesses adopting approved redress schemes receive meaningful protection from subsequent damages claims if the schemes are to achieve their intended purpose. It seemed too early to us to move to mandating redress schemes: it is better to gain experience from improving the voluntary regime first.
• Leniency immunity raises difficult questions. We recognised the CMA's desire to encourage cartel whistleblowers and increase cartel enforcement. However, we expressed reservations about proposals to grant Type A leniency applicants immunity from damages claims. Such a move would be out of line with the position in the EU and may not materially alter incentives, particularly if there is an international dimension to conduct. If adopted, we considered that immunity should be accompanied by robust disclosure obligations in the follow-on litigation (including for the leniency applicant) and clear safeguards allowing immunity to be withdrawn in appropriate cases. 
• Modernising CMA enforcement procedures. We expressed concerns about some of the proposals to transpose current CMA rules into guidance, for example in relation to decision-making processes. Watering down the rules in this way risks fairness to businesses under investigation. A prescribed framework for confidentiality rings is a sensible measure (both in the CMA and before the CAT) provided it gives sufficient protection to all types of confidential information. For example, it may be appropriate to take a somewhat different approach to technical information or valuable data, compared with more basic commercial information where the balance between secrecy and transparency is already well established).