CCA hosted international conference on Damages Directive

About a hundred lawyers, judges, corporate lawyers and professors participated in the international conference “Transposition of the Damages Directive – What are the expectations?” held in Zagreb on 5 December 2016.

The Ministry of the Economy, Entrepreneurship and Crafts, as a sponsor of the law, empowered the Croatian Competition Agency and its experts to lead the work group responsible for the drafting of the proposed draft Act on actions for damages for infringements of competition law that transposes the Directive 2014/104/EU of the European Parliament and of the Council of 26 November 2014 on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union into the Croatian national law.

The proposed draft act follows the Damages Directive in twenty articles but at the same time has to be adjusted to the Croatian Civil Obligations Act and the Civil Procedure Act. The compensation for damages will be decided in first instance by the Croatian commercial courts that generally rule in the compensation for damages procedures in other related areas.

The Damages Directive, which must be transposed into the national laws of the Member States by 27 December, has already been transposed by four Member States whereas in eight Member States (including Croatia) the process of adoption is in the pipeline.

The changes imposed by the Damages Directive are significant, as it is designed to use national courts to help victims of anticompetitive conduct and cartel behaviour obtain damages for losses suffered. The Damages Directive, which entered into force on 25 December 2014 after more than a decade of debate and negotiation, promotes a less fragmented standard for private antitrust damages actions across all Member States.

“In practice this will mean that the actions for damages may be filed by any natural or legal person that has suffered harm on the account of the infringement of competition rules but also by any citizen – consumer or competitor in the market in which competition has been distorted, or a legal person that believes it has been paying a higher price of goods or services or works due to the infringement of competition rules. In other words, once the Act on Damages enters into force, the undertakings that have been involved in the infringement of competition provisions may face the risk of being sued for damages. The harm will be properly quantified in the claims for damages whereas the courts will decide on the amount of compensation. The new provisions will ensure the deterrent effect on undertakings and send a clear message that the violation of competition does not pay” – pointed out at the conference the president of the Competition Council, Mladen Cerovac.

The conference consisted of two panels. The first panel consisting of the moderator Mario Krka, lawyer, and the panellists Gabrielė Venskaitytė, DG Competition, André Bywater, Cordery Compliance London, Peter Thyri, lawyer from Vienna and Frank Wijckmans, lawyer from Bruxelles discussed the practice of the Member States before the adoption the Damages Directive and the challenges they have been facing as regards some issues, such as business secrecy, disclosure of evidence, limitation periods, collective redress mechanisms, the passing-on of overcharges, joint and several liability, the calculation of damages, particularly the interest etc. The second panel focused more on anticipating the changes the new Damages Directive will bring about. It was moderated by Mirta Kapural from the CCA, head of the working group for the drafting of the Act on Damages. All the panellists, consisting of Natalie Miriam Harsdorf Enderndorf, vice-president of the Austrian competition authority, Davor Lekić from the Slovenian competition authority, Jelena Čuveljak, judge of the High Commercial Court in Zagreb and Vlatka Butorac Malnar from the Faculty of Law University of Rijeka, both members of the working group, agreed that this was quite a new regulation that will build completely new case law. At this moment it is difficult to say whether this new piece of legislation will increase the volume of actions for damages under national law for infringements of the competition law provisions. These procedures are usually complex, linked to high costs and implicate important commitment of the commercial court judges and expert witnesses, particularly in the quantification of harm. In this sense, the experts of the national competition authorities may offer valuable expertise.

There has been only one “stand-alone” claim for damages in Croatia so far, i.e. where an infringement is claimed independently of a competition authority’s decision. Actually, the scope and the number of “stand-alone” or “follow-on” cases cannot be predicted. The competition damages provisions do not make a difference although one may foresee a rise in the “follow-on” claims.