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UK consults on further changes to competition compensation law

It will become easier for victims of competition law breaches to claim compensation when the EU Damages Directive comes into force in December. 29 Jan 2016

However, UK law must be changed to implement the directive, and the Department for Business, Innovation and Skills (BIS) has published a consultation document on the changes that must be made.

The changes needed to UK law are relatively minor, BIS said. Access to damages for breaches of competition law varies across member states, and the Damages Directive aims to standardise the approach. However, the UK already has a "well-developed mechanism" for allowing claims on breaches of both EU and domestic competition law, and the UK government made sure during the negotiation of the damages directive "that it was based closely on the UK model", BIS said.

The principal decisions to be made are: whether to implement a separate approach for EU law, under a dual regime, or to apply the same approach to both EU and UK law under a single regime; how to handle the Directive's requirements on limitation periods for bringing claims; and when the changes should be implemented.

A dual regime is likely to lead to "uncertainty and confusion" for business, BIS said, as well as "higher familiarisation costs".

"We believe that this two-tier system would make it difficult for businesses and consumers to understand which regime applies to them and could result in an increase in satellite litigation, where parties contest which regime applies," BIS said.

"In order to minimise the uncertainty that would result from a dual regime the government believes that it should implement the Directive as a single regime," it said.

Limitation periods are designed to give a claimant enough time to bring their claim, while also giving the defendant confidence that they will not face further claims after the period is over, the report said. As the current UK limitation periods of six years in England, Wales and Northern Ireland and five years in Scotland match the EU Directive, BIS believes there is no need for change.  However, it has proposed a change to the starting point for limitation periods and when they can be suspended, in order to mirror the directive.

The UK must implement the changes by 27 December 2016. While "the government does not usually implement directives earlier than necessary", BIS said, it "believes that there are advantages for business in implementing the directive in October 2016, the nearest Common Commencement Date (CCD)".

Most new laws affecting businesses in the EU come into force on one of two CCDs each year – 6 April and 1 October.

The consultation will run until 9 March. An impact assessment on the effect on UK business has also been published.