EU Agrees Class Action Lawsuits against Cartels

The European Union (EU) has approved a new law, under which victims of cartels in Europe will gain greater powers to seek damages.

The green light for the proposed legislation came from the European Parliament (EP) nine years after the European Commission (EC) broached the idea, which aims to address concerns that differing national laws makes it hard for consumers and businesses to win compensation. Other obstacles include the difficulty of proving a violation and the costs of bringing a lawsuit.

The EC claims that only one in four cartels and antitrust infringements has actually faced damages claims in the past seven years. Its 2010 estimate put the cost of unrecovered damages of infringements at over €20bn.

The new rules, drafted by the EU competition authority, now need the approval of the 28 EU member countries before they can come into force.

European competition commissioner Joaquin Almunia welcomed the vote. “The Directive will help to make the right to full compensation a reality in the EU, by removing the practical obstacles that victims face today,” he said.

“When the Directive is adopted and implemented, obtaining redress will become easier for them, especially after a competition authority has found and sanctioned an infringement.”

However, EU officials emphasised that the new law would not see Europe adopt a US-style class action system, or the punitive damages and contingency fees that characterise it.

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