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The EU Antitrust Damages Directive - Transposition in the Member States edited by Rodger, Barry; Sousa Ferro, Miguel; Marcos, Francisco

Part II The Member State Reports on Transposition of the Directive, 9 Ireland

Mary Catherine Lucey

From: The EU Antitrust Damages Directive: Transposition in the Member States

Edited By: Barry Rodger, Miguel Sousa Ferro, Francisco Marcos

From: Oxford Competition Law (http://oxcat.ouplaw.com). (c) Oxford University Press, 2015. All Rights Reserved. Subscriber: null; date: 02 July 2020

Subject(s):
Cartels — Damages — Application of EU competition rules — National Competition Authorities (NCAs) — Jurisdictions — State and competition law

(p. 193) Ireland

1.  Transposition Background and Process

The Department of Jobs, Enterprise and Innovation was responsible for drafting the proposed transposition measures. For the most part, implementation took the form of regulations contained in a statutory instrument (SI): European Union (Actions for Damages for Infringements of Competition Law) Regulations 2017.1 The SI was signed by the Minister for Jobs, Enterprise and Innovation on 13 February 2017 and official notice of the making of this SI was published in Iris Oifgiúil on 17 February 2017.2 The Regulations adopt largely a straight ‘copy-out’ approach and are confined to competition law actions.

An SI is delegated legislation made by the appropriate minister and is permitted under Irish constitutional law where implementing regulations are limited to ‘fleshing’ out the policies and principles contained in the main measure (usually an Act or EU measure). In other words, the implementing Regulations cannot go outside the parameters of the Directive. As implementation took place by means of SI, regrettably for this chapter, there are no parliamentary debates. The absence of publicly available records or documents is compounded by the fact that the Department did not engage in public consultation in respect of implementing the Directive.

To properly appreciate the implementation, it is necessary to sketch some aspects of the prevailing regime in Ireland. Since 1991, Irish competition legislation has made specific provision for private actions.3 Although the 1991 Act was repealed, later legislation re-enacted many of the pre-existing provisions, including the grounds for taking private actions. Section 14(1) of the Competition Act 2002 provides: ‘[A]ny person who is aggrieved in consequence of any agreement, decision, concerted practice or abuse which is prohibited’ under Irish competition law has a right of (p. 194) action for relief. The range of potential plaintiffs envisaged by the section is drafted in relatively broad terms as an ‘aggrieved’ person. The reliefs available (initially under the 1991 Act and continued by subsequent legislation) are injunctions, declarations, and damages, including exemplary damages.4 Persons aggrieved by infringements of EU competition law can avail themselves of the right to sue under s14 of the 2002 Act. An action for damages may be taken against the infringing undertaking and against individuals involved in the undertaking, such as directors, managers, and officers (and persons acting de facto in such positions).

The balance of probabilities is the standard of proof for establishing an infringement of competition law.5 Thus, it is assumed6 that the same standard is applicable for a plaintiff seeking to prove causation and loss.7

Although the provision in Irish competition law for private actions is framed generously in terms of scope and, moreover, has been in place for decades, the track record of damages awards by Irish courts for competition law violations is, to put it mildly, underwhelming. As one highly regarded and experienced practitioner in Ireland observed, ‘instituting private competition law proceedings is notoriously difficult’.8 His observation, made in 2012, still holds true. Indeed, at the time of writing (September 2017), there has been no award of damages for an infringement of EU competition law9 and only one reported case for an infringement of Irish competition law.

The one award of damages occurred in Donovan v. ESB where the High Court decided there was an abuse of dominant position in violation of Irish competition law.10 The ESB (the main supplier of electricity in Ireland) abused its dominant position by imposing changes to the conditions under which it would supply electricity. On 5 May 1994, the court made the first award of damages under competition legislation. The plaintiffs (electrical contractors) were awarded IR£360,000 (ca €420,000). One interesting point to note is that the plaintiffs asserted that if they had believed the harm had been inflicted deliberately, they would have sought exemplary damages. The interesting point for this chapter in the appeal to the Supreme Court is the defendant’s submission that damages could not be awarded if the breach was unintentional and, in support, referred to EU Commission practice. The Supreme Court refused to accept this approach. It pointed out that this case was inter partes, that compensation would be awarded on the same basis as in tort or civil wrongs, and that ‘intention’ would only be taken into account in assessing exemplary damages.11

(p. 195) For completeness, it should be noted that two follow-on actions were initiated before the Irish courts after the European Commission imposed a fine on an Irish company (Irish Sugar plc). Irish Sugar was sued for damages by, first, a sugar importer (ASI) and, secondly, by Gem Pack Foods. From the perspective of precedents, it is disappointing that neither case came to judgment.12

A more recent and ongoing (at time of writing) development are the several damages claims before the High Court connected to a cartel among truck manufacturers. Fifty-one claims (seeking damages, including exemplary damages) were entered into the High Court list on 25 April 2017. The claims are understood to be the first in the European Union to arise from the European Commission’s investigation into truck manufacturers which culminated in a record fine decision in 2016.13

The paucity of judgments suggests that conducting private litigation in Ireland for damages for competition law infringements is not undertaken readily or easily. This observation prompts the next examination of a couple of features of the general legal landscape which, in practice, do not support individual private litigants. These features hinder litigation especially in situations where the financial loss suffered by an individual is not very high. These are, first, the limited availability of third-party funding and, secondly, the absence of a robust collective redress/class action mechanism.

The costs of conducting competition law actions are acknowledged to be high. Indeed, the Supreme Court has described such litigation as being ‘extremely expensive even cripplingly expensive’.14 In this light, the availability of funding is a very important matter in practice. Unlike the legal position in England and Wales (following the Criminal Law Act 1967),15 in Ireland maintenance and champerty are torts and criminal offences. Maintenance is defined as ‘the improper provision of support to litigation in which the supporter has no direct or legitimate interest16 and champerty is defined as an ‘aggravated form of maintenance and occurs when a person maintaining another’s litigation stipulates for a share of the proceeds of the action or suit’.17

Third-party funding is a topical issue in Ireland following the recent judgments in Persona Digital Telephony v. Minister for Enterprise and Business.18 As this case is highly relevant to the future prospects of initiating damages actions in Ireland, it is next considered in detail.

Persona needed the finance offered by professional third-party litigation funding and sought a declaration that the proposed arrangement was not prohibited.

(p. 196) The High Court considered a variety of approaches to interpreting maintenance and champerty.19 It felt itself limited by the requirement to ‘adjudicate on whether this type of funding agreement is prohibited by the torts and offences of maintenance and champerty in view of the Irish authorities cognisant of the restrictions placed upon it by the separation of powers’.20

The Court found there was no doubt that the laws of maintenance and champerty exist in Ireland.21 It concluded that Irish law prohibits an entity funding litigation in which it has no independent or bona fides interest for a share of the profits and that

‘third party funding arrangements cannot be viewed as being consistent with public policy in this jurisdiction or that modern ideas of propriety in litigation have expanded to such an extent to afford this Court the opportunity to characterise this funding arrangement as acceptable’.22

Persona was granted leave for its appeal to be heard by the Supreme Court rather than the Court of Appeal.23 A majority24 of the Supreme Court dismissed the appeal—basically on the ground that champerty was part of Irish law and that any material changes to the law fell to the legislature rather than the courts.25 Chief Justice Denham expressed her concern that the opponents of the plaintiff are the beneficiaries if the case does not proceed.26 Clarke J concurred with Denham CJ in dismissing the appeal, but he expressed his disquiet at the prospect of possibly denying the plaintiff access to justice.27

(p. 197) To complete the picture of litigation financing issues in Ireland, it should be noted that there is a tradition of cases being initiated on the so-called ‘no foal–no fee’ basis.28 That said, it must be acknowledged that this mechanism falls short of a funding arrangement which finances the essential expenses in litigating, such as costs of reports and expert witnesses.

The other highly relevant factor which has an indisputable bearing on the low level of damages actions is the absence in Irish law of a comprehensive collective redress mechanism akin to those available in many other jurisdictions where class actions are commonplace. The general rules of procedure for actions make only limited provision for actions involving more than one plaintiff.

A representative claim may be made under Order 15, rule 9, which provides:

[W]here there are numerous persons having the same interest in one cause or matter, one or more of such persons may sue or be sued, or may be authorised by the Court to defend, in such cause or matter, on behalf, or for the benefit, of all persons so interested.29

Difficulties have been identified with this procedure in the context of competition law actions.30 These include the requirement that every person has ‘the same interest’, the uncertainty whether this can be used in tort claims, and:

… in particular whether the court’s jurisdiction in such actions is limited to awarding injunctive or declaratory relief rather than damages. This position is based on a traditional view of representative actions, which, it could be argued is outdated. However, it may require a rule change or a new interpretation by the Irish courts before representative action based in tort can be taken.31

It is permitted to ‘join’ parties in a single action as plaintiffs under Order 15, rule 1(1), which states:

All persons may be joined in one action as plaintiffs in whom any right to relief in respect of or arising out of the same transaction or series of transactions is alleged to exist, whether jointly, severally, or in the alternative, where, if such persons brought separate actions, any common question of law or fact would arise; provided that if, upon the application of any defendant, it shall appear that such joinder may embarrass or delay the trial of the proceeding, the Court may order separate trials or make such order as may be expedient.

As pointed out by Dunleavy, while this rule may be useful in competition law actions, for example in a cartel scenario, the rule is limited to those cases in which the plaintiffs have already commenced their actions and it is not a basis for taking a class action.32

(p. 198) Finally, it is apt to pass a few words about the Irish court system. Jurisdiction to hear damages actions for competition law infringement is enjoyed only by courts within the general court system established under the Irish Constitution. These are the Circuit Court, High Court, Court of Appeal, and the Supreme Court. The Circuit Court has local and limited jurisdiction. Its monetary jurisdiction in damages actions for breach of contract or tort is limited to €75,000. The High Court has full original jurisdiction and is not limited in the amount of damages it may award. The Supreme Court is the court of final appeal.

In 2005, new procedural rules for ‘Competition Proceedings’ were introduced.33 They establish the ‘Competition List’ of the High Court (which is the ‘Competition Court’) to deal with cases coming within the definition of ‘competition proceedings’ which includes private actions instituted by persons aggrieved by an infringement of competition law.34 The rules set out case management procedures including pre-trial procedure. Interestingly, the rules makes explicit provision for the court to appoint an expert (following an application by a party or of the court’s own motion) to assist the court in understanding a matter or evidence.35 Experts on economic evidence have been appointed by the court in a few cases.36

The thin track record of competition damages actions which actually reach the stage of judgment from an Irish court means that there is a rather limited experiential context within which to predict what will be contentious, in practice, following the implementing Regulations.

2.  Scope of the Transposition Measure

2.1  Substantive scope

The regime set out in the implementing SI is necessarily confined to actions for damages for infringements of competition law as a SI cannot exceed the scope (p. 199) of the ‘parent’ measure which, in this case, is the Damages Directive. Indeed, the Regulations commence with the express statement that they are ‘for the purpose of giving effect to Directive No. 2014/104 EU’.37 It is notable that the Regulations do not confine themselves to cases in which EU competition law arises (either alone or in conjunction with Irish competition law), but also cover cases in which only Irish competition law is raised. The SI defines key concepts in the Interpretation (reg 2(1)). A ‘claim for damages’ means a claim for compensation for harm caused by an infringement of competition law and ‘infringement of competition law’ means an infringement of Arts 101 or 102 TFEU or of ss 4 or 5 of the Competition Act 2002.38

2.2  Temporal scope

One particularly remarkable aspect of the Irish Regulations is that they adopt a conservative approach to the temporal issue. The SI provides in reg 3: ‘[T]hese Regulations do not apply to infringements of competition law that occurred before 27 December 2016.’ It is possible (and perhaps likely) that the scope of cases covered by this phrase will be contentious, for example if there is a series of connected events. In any event, it must be expected that quite a lengthy period of time (likely to be years) will pass before these Regulations will get to be applied by courts. It is not clear why Ireland did not avail itself of the possibility offered by Art 22(2) of the Damages Directive to allow the application of procedural measures to cases in respect of which a national court was seized after 27 December 2014.

3.  Key Issues

3.1  Right to full compensation

Article 3 of the Damages Directive precludes overcompensationwhether by means of punitive, multiple or other types of damages’.39 As noted in section 1, Irish competition law, since 1991, has allowed an aggrieved person to sue for damages and expressly includes exemplary damages.

Regulation 4(3) details that ‘[f]ull compensation under these Regulations shall not lead to overcompensation, whether by means of punitive, multiple or other types of damages’. It is noteworthy that reg 4(4) amends s14 of the Competition Act 2002 by deleting ‘exemplary damages’ from the range of remedies available to private litigants. While, at first glance, this appears to be a radical alteration to the legal landscape, in practice the consequences will be tame as there is not a vibrant culture of Irish courts awarding exemplary damages. Nonetheless, there is an interesting (p. 200) constitutional issue which may be argued before the courts by questioning the vires (powers) of a Minister in an SI (delegated legislation) to repeal a provision of primary legislation, especially if the case involves an allegation of an infringement of only Irish (not EU) competition law.40

3.2  Disclosure of evidence

Regulation 5, the Irish implementing regulation on disclosure, is briefer than Art 5 of the Directive. This reflects the view that some of the Directive’s provisions are already part of pre-existing national rules on discovery (albeit with some difference in terminology).

In Ireland, competition law actions for damages come under the general rules of procedure in respect of evidence contained in the Rules of the Superior Court41 and the Circuit Court Rules.42 These rules make particular provision for ‘discovery’ applications. Discovery involves disclosure of documents, usually at pre-trial stage. For actions in the Circuit Court, the relevant rule is Order 32 as it deals with discovery and inspection of documents.43 For action in the High Court and Supreme Court, Order 31 is the relevant provision.44

In Irish law, there is a precondition for discovery orders, which is that the applicant must have first requested the other side to make a voluntary disclosure of the evidence. This requirement, motivated by concerns for efficiency and pragmatism, is not found in the Directive, but presumably is not precluded by the Directive.

The Irish rules of procedure allow any party to apply to court for an order against any other party to disclose documents which ‘are or have been in his possession, power or procurement’. The term ‘document’ has been interpreted by general case law as ‘something which teaches or gives information or a lesson or an example for instruction’.45 An application can be made by a person against another person for discovery of documents. The claimant must ground its application in sworn pleadings (an affidavit) which aver the necessity of these documents. ‘Necessity’ is defined in the sense that access is needed either so that the case can be disposed of fairly or for saving costs. Moreover, the application must give the reasons detailing why each category of evidence is required. The standard of ‘necessary’ was introduced in 1999 in order to allay concerns ‘about the dangers of unnecessarily costly and protracted litigation, and, (p. 201) in particular, the burdens on parties and the courts arising from excessive resort to automatic blanket discovery’.46 The test of ‘necessary’ has been interpreted as imposing ‘a clearly defined obligation upon a party seeking discovery to pinpoint the documents or category of documents required and required that party to give the reasons why they were required’.47 This ‘necessity’ test is not a literal transposition of the Directive’s test.

In a leading case on discovery in a competition law case, the Supreme Court stated that there must be:

… some proportionality between the extent or the volume of the documents to be discovered and the degree to which the documents are likely to advance the case of the applicant or to damage the case of his or her opponent in addition not ensuring that no party is taken by surprise by the production of documents at trial. That is not to gainsay in any sense that the primary test is whether the documents are relevant to the issues between the parties. Once that is established it will follow in most cases that their discovery is necessary for the fair disposal of those issues.48

The Regulations do not express the requirement of Art 5(1) of the Directive that courts enjoy competence to order the disclosure of evidence circumscribed as precisely and as narrowly as possible on the basis of reasonably available facts in the reasoned justification. Under procedural rules, the court has power to refuse the application or adjourn the proceedings or to grant the order. It can make the order in respect of some or all of the documents cited in the application, which should specify the precise categories of documents sought. Judges are aware that it is not for ‘the court to re-draft an applicant’s motion where it in effect amounts to a form of blanket discovery’.49 So-called ‘fishing expeditions’ are not permitted under Irish law and a test of relevance is applied. The High Court has succinctly set out the following four considerations:

  1. (1)  The court must decide as a matter of probability as to whether any particular document is relevant to the issues to be tried. It is not for the court to order discovery simply because there is a possibility that documents may be relevant.

  2. (2)  Relevance must be determined in relation to the pleadings in this specific case. Relevance is not to be determined by reason of submissions as to alleged facts put forward in affidavits in relation to the application for further and better discovery unless such submissions relate back to the pleadings or to already discovered documents. It should be noted that O. 31, r. 12 of the Rules of the Superior Courts 1986 specifically relates to discovery of documents relating to any matter in question therein.

  3. (3)  It follows from the first two principles that a party may not seek discovery of a document in order to find out whether the document may be relevant. A general trawl through the other party’s documentation is not permitted under the Rules.

  4. (4)  The court is entitled to take into account the extent to which discovery of documents might become oppressive, and should be astute to ensure that the procedure of discovery is not used as a tactic in the war between the parties.50

(p. 202) It is accepted that Irish courts have competence to grant discovery on a more limited basis than that sought by the claimant where it considers it appropriate to do so. Moreover, applications for discovery granted by the High Court can be appealed to the Supreme Court by the party which sought discovery. For example, in Framus Ltd v. CRH plc,51 the appeal was made on the grounds that the High Court judge ‘should have made more extensive orders for discovery and he was wrong in law in limiting the documents to be discovered to those specified in his order.52

Discovery is well developed in Irish law and has been ordered in competition law disputes. Indeed, the Supreme Court has expressly recognised the information asymmetry that exists in competition law cases. Murray J observed

‘where the nature of the plaintiff’s claim gives rise to issues in respect of which specific documents relevant to those issues are peculiarly within the knowledge of the defendant and would be unknown to a plaintiff. Such a situation is a factor to be taken into account, and I put it no higher than that as part of the circumstances in deciding the appropriate kind of order for discovery to be made’.53

In order to clearly and unequivocally implement Art 5(3) of the Directive, Ireland replicated its text in reg 5(1). Regulation 5(2) repeats the Directive’s text in the first sentence of Art 5(4). However, reg 5(2) does not continue on to express the obligation contained in the second sentence of Art 5(4), which requires national courts to have ‘effective measures’ at their disposal to protect confidential information.

Under Irish law, a party resisting discovery can request that the documents be made available in redacted form. When granting discovery, Irish courts may provide that unredacted sensitive information contained in discovered documents is not to be used outside the particular litigation. The delicate and competing interests that come into play in cases where confidentiality is claimed have been considered by the courts, which are alert to the need to exercise particular care before ordering discovery of confidential documents. In this respect, the High Court has gone so far as to allude to the need to take account of the ‘interests of justice’ and the ‘risk of unfair result’. The complexity of the issues to be balanced is well demonstrated by the following quotation:

[C]ourts should only order discovery of confidential documents (particularly where the documents involve the confidence of a person or body who is not a party to the proceedings) in circumstances where it becomes clear that the interests of justice in bringing about a fair result of the proceedings require such an order to be made. It is clear that confidential information (which is not privileged) must be revealed if not to reveal same would produce a risk of an unfair result of proceedings. The requirements of the interests of justice would, in those circumstances, undoubtedly outweigh any duty of confidence. There is ample authority for that proposition which now may be taken to be well settled. Where, therefore, it is clear that the materials sought will be relevant, then discovery must be made notwithstanding any confidentiality. However, it seems to me that the balancing of the rights involved also requires the application of the doctrine of proportionality. To that extent, it seems to me to be appropriate (p. 203) to interfere with the right of confidence to the minimum extent necessary consistent with securing that there be no risk of impairment of a fair hearing.54

This quotation was cited, with approval, in a recent case in which the High Court further added:

[A] party may be required to specify legitimate bases for seeking information which is of a confidential nature because of the undesirability of allowing a mere allegation to give rise to an entitlement to access to such information. Where contested documentation is confidential, then the courts should exercise special care to ensure that a party is not given free access to such information without having satisfied the court that there is some basis on which the documentation is likely to be relevant and necessary.55

It thus seems likely that pre-existing provisions of Irish law satisfy the obligation in the second sentence of Art 5(4). As for disclosure of evidence held in the files of a national competition authority (NCA), regs 6 and 7 basically copy out Arts 6 and 7, so there is no difficulty as regards transposition.

There are sanctions for not complying properly with discovery ordered by either the Circuit Court or High Court. These sanctions include dismissal of action or striking out of defence. Failure to comply with a High Court order for discovery can additionally be penalised by means of attachment (which is an order to bring property into the custody of the court).

Given that discovery is already a well-developed procedure in Irish law, the implementation of the disclosure provisions is not expected to be as disruptive as in other Member States where disclosure is being introduced. However, the pre-existing Irish provisions are not exact replicas of Art 5 of the Directive. While they appear to be generally consonant with the Directive, some disputes may arise in the future. The Irish standards of necessity and relevance may mean a different (perhaps stricter) approach will apply in Ireland compared to the position in Member States that introduce disclosure literally in accordance with the provisions of the Directive, in which criteria of plausibility and proportionality are more to the fore. That said, Irish courts may , following these Regulations, have to adapt their interpretations of the Irish rules of procedure to align more closely with the Directive.

3.3  Effect of NCA decisions

Regulations 8(1) and (2) transcribe verbatim Arts 9(1) and (2) of the Directive. There is an elaboration in reg 8(3) which defines a ‘final decision’ in relation to an infringement of competition law as ‘a decision which cannot, or that can no longer, be appealed’.

This supplements the existing provision made by national competition legislation in 2012 with the introduction of a doctrine of res judicata by providing that a determination by an Irish court of an infringement of EU (or Irish) competition (p. 204) law by an undertaking can be relied on in subsequent private damages actions.56 The usefulness of this provision in practice is, as Power points out, limited: it cannot be relied upon against an individual manager or director and, moreover, it does not cover decisions of the European Commission or judgments of the ECJ.57

By way of background, it is important to appreciate the unique design of the institutional architecture under which competition law in Ireland (comprising EU competition law and Irish competition law) is enforced.58 The root of the design’s originality stems from the particular arrangements made in Ireland as regards the ‘national competition authority’.59 To satisfy the requirement of Art 35 of EU Regulation 1/201360 to designate NCAs, Ireland had to designate a combination of administrative and judicial institutions as NCAs.61 The Competition Authority (which later evolved into the Competition and Consumer Protection Commission) has investigative powers, but cannot make determinations of an infringement of EU/Irish competition law.62 It may initiate either civil proceedings or a criminal prosecution (if minor offence) in the courts. Serious criminal prosecutions are tried on indictment (before a jury) and can be initiated only by the Director of Public Prosecutions. Thus, in Ireland, unlike many other Member States, the pertinent NCA infringement decision will emanate from a court and not from an Irish administrative institution.

Two observations can be made. The first is that the Directive seems to assume that an NCA determination will be a reasoned one (somewhat along the lines of a Commission decision). However, as Doherty and Fitzpatrick point out, a guilty verdict from a jury will not contain any explanation of the reasons for finding the existence of violation, and while some deductions from the evidence may be possible, it may not be easy for the follow-on action.63

(p. 205) The second observation is that, to date, there is a low level of Irish NCA infringement decisions upon which ‘follow-on’ actions can be based.64 In this light, it is disappointing for potential plaintiffs in Ireland that Art 9(2) on final decisions taken by an NCA in another Member State will have only at least prima facie evidence of an infringement. The originally proposed version of Art 9(2) went much further. This particular matter was addressed by the Irish Department of Enterprise, Trade and Employment, on behalf of Ireland, in its reponse to the Commission’s White Paper (of July 2008).65 The response identified the potential for difficulties (including constitutional ones) to arise if administrative decisions were to be rendered binding on Irish courts.

3.4  Limitation period

The duration of the minimum limitation period of five years was unproblematic for Ireland where the usual period of limitations (contained in the generally applicable Statute of Limitations 1957) is six years. The interesting (and novel) issue which arose was regarding the point at which the limitation ‘clock’ would commence. The implementing SI amended the Statute of Limitations Act 1957 by inserting a new section dealing specifically with when the period for competition law damages actions begins to run. The layout of the text adopted in the implementing reg 9 differs slightly from the approach taken in Art 10 of the Directive.

Regulation 9 amends the Statute of Limitations 1957 in respect of when time starts to run as the latest of five possible dates, which are listed as follows:

  1. (a)  the date on which the infringement of competition law to which the cause of action relates ceased;

  2. (b)  the date on which the person in whom the cause of action vests came to know of the acts or omissions that constituted such infringement;

  3. (c)  the date on which that person came to know or could reasonably know that those acts or omissions constituted such an infringement;

  4. (d)  the date on which that person came to know or could reasonably be expected to know that the infringement caused harm (within the meaning of the Directive) to that person; and

  5. (e)  the date on which that person came to know or could reasonably be expected to have come to know the identity of the infringer concerned.

It is not clear why the Irish version did not ‘cut and paste’ Art 10 exactly when, in fact, it uses the same language for the steps, but deviates in layout slightly from the EU schema.

In practice, the window or time frame within which competition law damages actions can be issued is greater following the SI than previously.

(p. 206) 3.5  Joint and several liability

Regulation 11 is almost identical to Art 10 save that, in reg 11(7), it spells out the definition of small or medium-sized enterprise (SME).

By way of background context, it should be noted that there is a generally applicable domestic law (Civil Liability Act 1961) which provides for joint and several liability. Interestingly, the implementing Regulations are expressly stated to be ‘in addition to and not in substitution of the 1961 Act in respect of concurrent wrongdoers’. It is noteworthy that the Irish legislation refers to ‘fault’ whereas the Directive refers to ‘relative responsibility’.66 In particular, s21(2) of the 1961 Act provides, ‘[i]n any proceedings for contribution under this Part, the amount of the contribution recoverable from any contributors shall be such as may be found by the court to be just and equitable having regard to the degree of that contributor’s fault’. Section 34(1)(a) on contributory negligence provides that ‘if, having regard to all the circumstances of the case, it is not possible to establish different degrees of fault, the liability shall be apportioned equally’. It should be noted that the Rules of the Superior Courts contain a ‘third party procedure’ under which third parties with joint responsibility can be ‘joined’ to an action.67

3.6  Passing on

Irish competition law was silent on the issue of ‘passing on’. Consequently, reg 11 on ‘passing on’ is an innovation and intends to pre-empt uncertainty arising in respect of the relevance of general principles of restitution and unjust enrichment. Regulation 11(7) states that a ‘court shall decide the share of any overcharge that was passed on’. The language used in the Irish Regulations is not an exact match with than that used in Art 12(5) of the Directive, which is that courts ‘have the power to estimate, in accordance with national procedures, the share of any overcharge that was passed on’. It remains to be seen whether the difference in verb (‘decide’ instead of ‘estimate’) is of practical significance.

At time of writing, it seems (as far as can be determined) that Ireland has not laid down ‘procedural rules appropriate to ensure that compensation for actual loss at any level of the supply chain does not exceed the overcharge suffered at that level’, as stipulated by Art 12(2).

While reg 13 is mostly a straight copy of Art 14, it makes additional provision in reg 13(3) by stating that ‘a claim for damages or the amount of compensation to be awarded shall take into account the commercial practice that price increases are passed on down the supply chain’.

Regulation 13 introduces the presumption that the overcharge was passed on to indirect purchasers and, as such, this marks a departure from the usual general requirement on claimants to prove the harm they suffered.

(p. 207) 3.7  Quantification

Regulation 15 mirrors Art 17 of the Directive. No new procedural rules were introduced by the SI, which simply repeats the principle expressed in the Directive that the claimant’s right to damages should not be made ‘practically impossible or excessively difficult’. It introduces the rebuttable presumption that harm is caused by cartels. The Business Law Committee of the Law Society of Ireland made a submission to the Department of Jobs, Enterprise and Innovation which argued that the Directive’s broad definition of ‘cartel’ risked overextending the presumption to practices where it is unwarranted. It expressed the view that defendants in cartel cases already face heavy odds stacked against them as regards presumptions and that it would be undesirable to include this provision in Irish law.68

3.8  Consensual dispute resolution

In Ireland, alternative dispute resolution (ADR) would be a more familiar term than consensual dispute resolution (CDR). Regulation 16(1) covers the ground of Art 18(2) of the Directive, but adds that reg 16(1) is ‘without prejudice to provisions in law on matters of arbitration’.

3.9  Incorrect or incomplete transposition

3.9.1  Limitation period

No specific measure was introduced to comply with the requirement in Art 11(4) of the Directive that the limitation period is ‘reasonable and sufficient to allow injured parties to bring’ such actions. Presumably, it was believed that reasonableness and sufficiency can be assumed as the limitation periods are certainly no shorter than those which prevail for initiating court actions generally.

3.9.2  Passing on of overcharges

Article 12(2) of the Directive requires Member States to lay down procedural rules to ensure that the compensation for actual loss at any level of the supply chain does not exceed the overcharge harm which was suffered at that level. As far as can be determined at the time of writing, no such procedural rules have yet been introduced in Ireland.

3.9.3  Power of courts to estimate amount of overcharge

Regulation 11(7) states that the court shall ‘decide the share of any overcharge that was passed on’; this is not an exact copy of Art 12(5) of the Directive, which refers to a national court’s power to ‘estimate’.

(p. 208) 3.9.4  Disclosure

The Irish tests for discovery do not exactly match the Directive’s criteria in Art 5. These were discussed in subsection 3.2.

4.  Concluding Remarks

It is not generally expected that the Directive and the implementing Regulations will stimulate a radical explosion in the level of private competition law actions before the Irish courts. This is due, first, to the fact that the implementing Regulations largely adopted a ‘copy-out’ approach and, secondly, to the traditionally low volume of private enforcement of competition law before Irish courts by means of claims for damages. The track record is relevant because private damages actions for competition law infringements have been expressly permitted by legislation since 1991, and indeed that legislation permitted more generous awards than those permitted by the Directive as it allowed claims for ‘exemplary’ damages. Other problems such as the informational asymmetry in competition law actions have already been recognised by the Irish courts, which are well accustomed to adjudicating on applications for discovery in general, as well as in competition law disputes. It is possible that there will be some adjustment of emphasis in future applications for disclosure in relation to proportionality. Also, there may be disputes about the interpretation of the Irish criteria of ‘necessity’ and ‘relevance’ in light of the Directive’s criteria.

Another reason for not anticipating an explosion of litigation in the aftermath of the Directive is that the implementing Regulations take a very conservative stance on their temporal applicability. It is expressly stated that they do not apply to infringements of competition law that occurred before 27 December 2016.

While the implementation of the Directive in Ireland entailed a number of amendments to existing procedures and practice, its impact on the quantity of private actions is not expected to be revolutionary. This is because the Directive does not address the greatest challenges faced by competition law plaintiffs in private actions before Irish courts, such as third-party funding and collective redress. It is important to be quite precise about the scope of the Persona judgment on funding because it does not prohibit all third-party funding agreements. The precise issue at stake, as the Chief Justice framed it, was ‘whether an agreement to fund, where there is no connection between the plaintiffs and the funder other than the funder’s decision to fund, is contrary to law’.69 This judgment does not cover cases where there is a different type of agreement, which enshrines a direct link between the funder and the putative plaintiff, such as where the funder holds equity or a shareholding. The other significant obstacle to private enforcement in Ireland that is not addressed by the Directive is the absence of a versatile and effective mechanism for collective redress or class actions.

Footnotes:

1  SI No 43 of 2017, available at http://www.irishstatutebook.ie/eli/2017/si/43/made/en/print. Some pre-existing provisions of Irish law were regarded as satisfying the requirements of Directive, for example in relation to disclosure.

2  Although signed in February 2017, the Regulations were deemed to come into effect on 31 December 2016.

3  On private enforcement, see D. McFadden, The Private Enforcement of Competition Law in Ireland (Hart, 2013).

4  The domestic provision for exemplary damages has been repealed by the implementing Regulations for the Damages Directive: see later subsection 2.3. Also see M. C. Lucey, ‘Consumers claiming compensation for competition law infringements’ (2018) 7(2) EuCML 51.

5  Masterfoods ltd t/a Mars Ireland v. H.B. Ice Cream Ltd [1993] ILRM 145, per Keane J.

6  N. Dunleavy, Competition Law: A Practitioner’s Guide (Bloomsbury Professional, 2010), p. 641.

7  Thus, in practice, damages will not be awarded unless there is injury.

8  V. Power, ‘Irish innovations to facilitate competition litigation: Ireland’s Competition (Amendment) Act 2012’ [2012] 4 GCLR 168, 170.

9  Chanelle Veterinary Limited v. Pfizer (Ireland) Ltd [1999] 1 IR 365 is an example of a damages action for infringement of EU competition law initiated before the Irish courts. The plaintiff failed to prove the existence of an infringement.

10  [1994] 2 IR 305.

11  [1997] Irish Competition Law Reports 380 (Supreme Court).

12  Formal settlements and informal pre-trial resolutions of cases undoubtedly contribute to the dearth of competition law judgments.

13  Truck manufacturers including MAN, Daimler, DAF, Iveco, and Volvo/Renault were fined by the European Commission in July 2016.

14  Pierce t/a Swords Memorial & anor v. Dublin Cemeteries Committee & ors [2009] IESC 47, cited in P. Andrews, P. Gorecki, and D. McFadden, Modern Irish Competition Law (Wolters Kluwer Law and Business, 2015), p. 168.

15  Sections 13 and s14 of the Criminal Law Act 1967.

16  Greenclean Waste Management Ltd. v. Maurice Leahy & Co. Solicitor (No. 2) [2014] IEHC 314, per Hogan J.

17  Ibid.   

18  [2015] IEHC 457, per Donnelly J.

19  The plaintiffs argued that the torts and offences of maintenance and champerty should be seen in light of modern public policy and in light of the development of the doctrines by the common law over time, as well as in light of constitutional rights. The defence succinctly argued that the torts of maintenance and champerty exist in Ireland and have been defined in terms which capture the funding agreement, which is therefore void for illegality. The defendants further submitted that the plaintiffs were asking the court to act beyond its powers and alter the scope of the offences and torts of maintenance and champerty.

20  [2015] IEHC 457, para 86. The Court was mindful of the fact that it was not being asked to examine the constitutionality of the offences and torts of maintenance and champerty and that no declaration of unconstitutionality had been sought.

21  Ibid, at para 81, it noted ‘[W]hile “modern ideas of propriety” may not necessarily include such deep suspicion of properly policed professional third party funding agreements having regard to changing views on public policy in other common law jurisdictions, the entrenched statements as to the prohibition of such type of agreements in this jurisdiction means that any amendment to that position may, at the very least, be for an appellate court, if not the legislature.’

22  Ibid, at para 87.

23  Such permission is granted only exceptionally and in cases where there is an issue of general public importance.

24  McKechnie J dissented from his colleagues Denham CJ, Clarke J (as he then was), MacMenamin J, and Dunne J.

25  Delivered on 23 May 2017. The judgment of Denham CJ (and links to other judgments in this case) is available at http://www.courts.ie/Judgments.nsf/bce24a8184816f1580256ef30048ca50/30b4f1eeaaf5d9a480258129003925fe?OpenDocument.

26  At para 54(vii).

27  He acknowledged the ‘very real possibility that this case might not go to trial because of the difficulties encountered by the plaintiff/appellant (Persona) in being able to run the case without third party funding’ (at para 2(2)). He further considered a series of factors which need to be taken into account when assessing overall whether there is effective access to justice and, ultimately, concluded that the choice of solution to the problems in funding actions is a matter for the legislator or the Executive and not the courts.

28  Indeed, in the Persona judgment, Denham CJ noted that the long history of cases being taken on such a basis includes ‘many of the most important cases’ (at para 54(vii)).

30  N. Dunleavy, Competition Law: A Practitioner’s Guide (Bloomsbury Professional, 2010), p. 635.

31  Ibid, citing Law Reform Commission, Consultation Paper on Multi-Party Litigation (Class Actions), LRC CP 25-2003 (July 2003), paras 1.09–17.

32  Ibid.

33  SI No 130 of 2005 Rules of the Superior Courts (Competition Proceedings) 2005, introduced Order 63 B and is available at http://www.legislation.ie/eli/2005/si/130/made/en/print.

34  See Ryanair v. Revenue Commissioners [2013] IEHC 13 for an interesting judgment in which Cooke J refused a motion from Ryanair to be admitted to the ‘Competition List’. It is important to appreciate that there is no bar on making competition law arguments in cases which are not on the Competition List, for example involving judicial review types of application.

35  It provides at rule 23:

  1. (1)  The Court may, on the application of a party or of its own motion and having heard the parties, appoint a person to assist the court in understanding or clarifying a matter, or evidence in relation to a matter, in respect of which that person (in this rule hereinafter called an ‘expert’) has skill and experience.

  2. (2)  The Court may appoint an expert on the nomination of the parties or that of the court, and on such terms as to the payment of his fees and otherwise as the Court may direct.

  3. (3)  The expert shall attend so much of the hearing and be available thereafter to assist the Court as aforesaid, as the Court shall direct.

  4. (4)  Where the expert provides advice or other information to the Court, the Court shall, where it considers it appropriate in the interests of justice, inform the parties of such advice or information and afford each of them an opportunity to make submissions in respect of it.

36  For example in Competition Authority v. BIDS [2006] IEHC 294.

37  This jurisdictional point is important for a comment made later in this chapter about the minister’s powers to repeal domestic legislation (providing for exemplary damages).

38  Sections 4 and 5 of the Competition Act 2002 are the domestic equivalents of Arts 101 and 102 TFEU.

39  Article 3(3) of the Directive.

40  This question was raised by Vincent Power (and members of audience) at a conference ‘Private Enforcement of Competition Law’ in Dublin (6 October 2017), organised by ISEL and the Bar of Ireland. Whether the particular regulation falls foul of the Irish Constitution is a complex question whose resolution cannot be pursued here.

41  Rules of Procedure for High Court and Supreme Court were adopted on 17 January 1986 and came into force on 1 October 1986.

42  Rules of Procedure for Circuit Court were made on 15 November 2001 and came into operation 3 December 2001.

45  McCarthy v. O’Flynn [1979] IR 127, 131.

46  Ryanair plc v. Aer Rianta cpt [2003] 4 IR 264, 277, per Fennelly J.

47  Swords v. Western Protein Ltd [2001] 1 I.R. 324, 328, per Morris P.

48  Framus Ltd v. CRH plc [2004] 2 IR 20, 38.

49  Ibid, 43.

50  Hannon v. Commissioners for Public Works [2001] IEHC 59, per McCracken J.

51  [2004] 2 IR 20 (SC).

52  Framus Ltd v. CRH plc [2004] 2 IR 20.

53  Ibid, 27.

54  Independent Newspapers v Murphy [2006] IEHC 27, 63.

55  Flogas v. Trugas [2012] IEHC 259, per McGovern J.

56  Section 8 of the Competition (Amendment) Act 2012.

57  V. Power, ‘Irish innovations to facilitate competition litigation: Ireland’s Competition (Amendment) Act 2012’ [2012] 4 GCLR 168, 171.

58  See further M.C. Lucey, ‘The new Irish Competition and Consumer Protection Commission: is this “powerful watchdog with real teeth” powerful enough?’ (2015) 6(3) Journal of European Competition Law & Practice 185 and M.C. Lucey, ‘Ireland: “out of step”—coping with constitutional concerns about civil fines’ (2017) 2 Concurrences Review.

59  The explanation for this particular architecture is that the Irish Constitution has been interpreted so that judicial power is exercisable, apart from limited cases, by judicial and not administrative institutions. See M.C. Lucey, ‘Application of European Community competition law: some implications of Bunreacht na hEireann’ in M.C. Lucey and C. Keville (eds), Irish Perspectives on EC Law (Round Hall Sweet & Maxwell, 2003), pp. 79–110 and M.C. Lucey, ‘Public enforcement of EU competition law in Ireland: appraising divergence’ (2016) 12(1) Competition Law Review 9.

60  Article 35 of Regulation (EC) No 1 /2003 contains the obligation to designate. Article 5 of the Regulation lists the enforcement competences.

61  European Communities (Implementation of the Rules on Competition Laid down in Articles 81 and 82 of the Treaty) Regulations 2004 (SI No 195 of 2004), as amended by the European Communities (Implementation of the Rules on Competition Laid Down in Articles 81 and 82 of the Treaty) (Amendment) Regulations 2007 (SI No 525 of 2007).

62  ComReg was later designated an NCA for the communications sector: European Communities (Implementation of the Rules on Competition Laid Down in Articles 81 and 82 of the Treaty) (Amendment) Regulations 2007 (SI No 525 of 2007).

63  The finding of liability in a criminal case would be reached by a jury verdict, which in turn raises unique difficulties in the identification of the precise reasons for the verdict: B. Doherty and A. Fitzpatrick, ‘Courage to change? The rocky road to Directive 2014/104/ EU and the future of private competition law enforcement in Ireland’ [2015] 18(2) Irish Journal of European Law 15, 36.

64  Perhaps the number of infringement determinations (which would ground later follow-on actions) would be higher if the CCPC enjoyed competence to make infringement determinations.

66  This point was made by Nathy Dunleavy in his presentation at ‘Private Enforcement of Competition Law’ in Dublin (6 October 2017), organised by ISEL and the Bar of Ireland.

67  Order 7 and Order 16.

68  Part 4.4.

69  At para 21 (emphasis added).