Business, Innovation and SkillsWritten evidence submitted by Herbert Smith Freehills LLP

DRAFT CONSUMER RIGHTS BILL—PRIVATE ACTIONS IN COMPETITION LAW

1. Introduction

1.1 Herbert Smith Freehills LLP is grateful for the opportunity to provide written evidence to the Commons Select Committee on the draft Consumer Rights Bill (“draft Bill”). Our evidence addresses the proposed provisions within the draft Bill in respect of private actions in competition law only, namely those within Section 82 and Schedule 7 of the draft Bill.1

1.2 Herbert Smith Freehills LLP (formerly Herbert Smith LLP) is a leading global commercial law firm, advising clients in a variety of sectors.2 Herbert Smith Freehills LLP has significant expertise in advising clients in respect of the private enforcement of competition law, in particular in the UK. The comments contained in this document are those of Herbert Smith Freehills LLP and do not represent the views of any of our individual clients.

1.3 We would be happy to respond to any questions the Committee may have and/or provide oral evidence to the Committee if that would be helpful.3

2. Executive Summary

2.1 In summary, our key comments on the relevant provisions of the draft Bill are as follows.

Collective proceedings

Proposed new Section 47B(8) Competition Act 1998 (“CA98”) as to those persons who may act as a representative to bring collective proceedings requires amendment to ensure that there is sufficiently robust judicial control over this issue.

Proposed new Section 47B(8) CA98 should require opt-out collective proceedings to be the “most suitable” method of bringing claims before such proceedings can be certified.

The proposed new collective proceeding should only apply to claims arising after commencement of the relevant provisions.

Limitation periods

Proposed new Section 47E CA98 requires amendment to ensure that the application of the limitation rules, in particular during the transitional period, is clearer.

Collective settlements

Proposed new Sections 49A and 49B CA98 should provide that the Competition Appeal Tribunal (“Tribunal”) may approve a proposed opt-out collective settlement notwithstanding a provision that any unclaimed damages are to be paid to a recipient other than the Access to Justice Foundation, including to the defendant(s).

CMA approved redress schemes

In order to promote effective alternative dispute resolution (“ADR”), undertakings offering a redress scheme need to be able to provide within such a scheme that, if a person has been compensated under a CMA-approved redress scheme, it waives its rights to bring a claim in respect of the same infringement.

The Tribunal

Proposed new Section 47A(3) CA98 should allow the Tribunal to grant declaratory relief.

Proposed new Paragraphs 15A-16C of Schedule 4 Enterprise Act 2002 (“EA2002”) should specify a number of further issues which need to be included in the Tribunal’s Rules, and revised draft Rules should be published ahead of the Bill’s introduction.

3. Proceedings before the Tribunal (Paragraph 4 Schedule 7 of the Draft Bill/Proposed New Section 47A CA98)

Jurisdiction of the Tribunal and the transfer of claims

3.1 Proposed new Section 47A CA98 is limited to claims in respect of infringements of the UK/EU competition law prohibitions. However, in “stand-alone” claims a competition claim may be included within a wider set of additional or alternative claims. Such “mixed” claims may, therefore, only be brought in the High Court.4

3.2 The Government response of 29 January 2013 to the Consultation Document (“Government Response”) indicated5 that Section 16 EA2002 would be activated in order to allow proceedings or parts of proceedings relating to an infringement issue to be transferred by the High Court6 to the Tribunal. We assume that this provision will therefore be activated.7

Relief

3.3 Proposed new Section 47A(3) CA98 does not appear to allow the Tribunal to grant declaratory relief. We consider that it should be open to the Tribunal to grant such relief, as is the position in the High Court.8

Infringement decisions

3.4 For completeness, we assume it is intended that decisions of the concurrent sector regulators9 that the relevant prohibition(s) has been infringed will constitute an “infringement decision” for the purpose of revised Part I CA98 (in addition to decisions of the CMA, the Tribunal and the European Commission).10

4. Collective Proceedings (Paragraph 5 Schedule 7 of the Draft Bill/Proposed New Section 47B CA98)

Representatives

4.1 We have concerns that the provisions of proposed new Section 47B(8) CA98 as to those persons who may act as a representative to bring collective proceedings are not sufficiently robust to constitute the “strong safeguard” envisaged within the Government Response.11

Non-class member representatives

4.2 Proposed new Section 47B(8)(b) CA98 would permit any non-class member to be appointed as the representative, provided that the Tribunal considers that it is “just and reasonable” for that person to act as a representative in the collective proceedings.

4.3 Given the importance of rigorous review by the Tribunal of the suitability of representatives, we consider that the wording “and that person is a suitable representative” should also be added at the end of new Section 47B(8)(b) CA98.

4.4 In addition, assuming that the intention of Government (as set out in the Government Response) remains that law firms, third party funders and special purpose vehicles should not be able to act as representatives, this point needs to be dealt within in Section 47B(8)(b) CA98, or within revised Tribunal Rules.

Class member representatives

4.5 Proposed new Section 47B(8)(a) CA98 would permit any class member to be appointed as the representative, without any qualification that the Tribunal considers that it is just and reasonable for this person to so act, or that this person is a suitable representative.

4.6 Given the importance of rigorous review by the Tribunal of the suitability of representatives, we consider that these additional qualifications should be added to Section 47B(8)(a) CA98, as for non-class member representatives.12

Multiple proceedings

4.7 In some cases multiple collective proceedings may commenced in respect of the same alleged infringement of competition law (in particular in follow-on cartel damages claims).

4.8 It is important that provisions are included within the revised Tribunal Rules setting out the approach which will be applied in such cases. On this point we note that granting priority to the first representative to file is not necessarily the best approach for identifying the most suitable representative. It will be important to ensure that incentives to issue proceedings prematurely in order to secure this type of priority, which could interfere with the public enforcement regime, do not arise.

Sub-classes

4.9 In relation to collective proceedings involving, for example, claims by both direct and indirect purchasers, if the Tribunal considers these as eligible for inclusion in collective proceedings it will need to consider whether the collective proceedings order should provide for sub-classes (under proposed new Section 47B(7)(b) CA98). If so, it will need to consider whether separate representatives are required for each such sub-class.

4.10 Accordingly, we consider that new Section 47B CA98 should define class to include a sub-class, and define representatives so as to include representatives for sub-classes.

Certification

Suitability for collective proceedings

4.11 Paragraph 5.55 of the Government Response stated that the certification process should include a requirement that a “collective action must be the best way of bringing the case”, which we support. However, proposed new Section 47B(6) CA98 as currently drafted refers only to a requirement that claims “are suitable” to be brought in collective proceedings (and that they raise the same, similar, or related issues of fact or law).

4.12 We consider that this should be amended to provide that collective proceedings are the “most suitable” or “most appropriate” method of bringing the claims.13

4.13 We note the approach within the draft Bill (proposed new Section 47B(6) CA98 and proposed new Paragraph 15B Schedule 4 EA2002) of leaving the factors which the Tribunal must take into account when deciding whether a claim is so suitable (or most suitable under our proposal) for collective proceedings to be specified within revised Tribunal Rules. Although we agree that this approach is generally sensible, we consider that it would be preferable if the legislation itself specified certain key factors which must be taken into account by the Tribunal in this regard, in particular a preliminary merits test.

4.14 We also consider that whether the defendant/defendants have put forward a redress scheme and had this approved by the CMA (see below), or engaged in other forms of appropriate ADR, is a relevant factor for this assessment and that this should be reflected in the legislation (or at least within the revised Tribunal Rules).

Suitability for opt-out or opt-in collective proceedings

4.15 The ability for proceedings to be brought on an opt-out basis was the key area of concern raised during the consultation process, reflected in the Government’s recognition of the need for “strong safeguards”. Accordingly, we consider that new Section 47B CA98 should provide explicitly for an obligation on the Tribunal to consider whether opt-in or opt-out collective proceedings are the “most suitable” or “most appropriate” basis for the proceedings before specifying the basis for proceeding.14

Claims to which new Section 47B CA98 will apply

4.16 We note with concern Paragraph 5(2) Schedule 7 of the draft Bill which provides for the new Section 47B CA98 on collective proceedings to apply to claims arising before the commencement of the paragraph.

4.17 The introduction of the ability for claimants to bring opt-out collective proceedings is a radical change to the current procedures for multi-party litigation within the UK, which gives rise to legitimate concerns about vexatious cases and the creation of a litigation culture (as was recognised within the Government Response). Moreover, as outlined in the HSF Response, the likelihood and extent of private actions, and in particular whether opt-out collective actions are possible, is and has been a key factor in any assessment by an undertaking of whether to apply for leniency.

4.18 To introduce the retrospective ability to bring collective proceedings in relation to claims which arose prior to the introduction of this radically new form of procedure is inappropriate, and could undermine the basis for the delicate weighing exercise of whether to apply for leniency which has already been carried out by undertakings who have chosen to apply for leniency and therefore bring cartel behaviour to light.

5. Limitation Periods (Paragraph 8 Schedule 7 of the Draft BILL/Proposed New Section 47E CA98)

5.1 It is well known15 that the limitation period that currently applies to claims before the Tribunal has given rise to significant preliminary litigation, and the resulting delay and uncertainty is one of the factors which has led to competition law damages claims being brought in the High Court rather than in the Tribunal. It is therefore crucial that any ambiguities in respect of limitation periods in the draft Bill be resolved to minimise similar issues occurring under the new regime.

5.2 In this context, we have concerns about the operation of the proposed new limitation periods in relation to claims arising before the commencement of Paragraph 8 of the draft Bill, and that the provisions are unclear in a number of respects.

Application of new limitation periods to proceedings under proposed new Sections 47A and 47B CA98

5.3 Paragraph 8(2) Schedule 7 of the draft Bill provides that the new limitation rules in proposed new Section 47E CA98 do not apply in relation to claims arising before the commencement of Paragraph 8.

5.4 However, the provisions on commencement of proposed new Sections 47A CA98 (allowing stand-alone claims to be brought in the Tribunal) and 47B CA98 (allowing collective proceedings to be brought in the Tribunal), Paragraphs 4(2) and 5(2) Schedule 7 of the draft Bill, provide that the new Sections 47A and 47B CA98 apply to claims arising before the commencement of those provisions.

5.5 The interaction of these provisions means that it is not clear what limitation period would apply to claims arising before the commencement of the relevant paragraphs, and indeed whether any limitation period would apply at all.

5.5.1In relation to stand-alone claims under proposed new Section 47A CA98 and Section 47B CA98, the existing limitation period16 cannot apply given this is premised on the existence of an infringement decision and by reference to the provisions of current Section 47A CA98, which will have been replaced. Therefore as currently drafted the new provisions may allow stand-alone claims to be brought in the Tribunal which could not currently be brought either in the Tribunal or the High Court (due to exhaustion of the applicable limitation period), and it would appear that no limitation period would appear to apply to such claims.

5.5.2In relation to follow-on claims under proposed new Section 47A CA98 and Section 47B CA98, it is also not clear what the position on limitation would be, if any, given the reference within the current limitation rules to the provisions of current Section 47A CA98, which will have been replaced.

5.6 Any outcome that allows claims which otherwise could not be brought to be “revived”, or which leaves a lacuna in which no limitation period applies, would clearly be undesirable from a policy perspective. It would give rise to uncertainty for undertakings as regards their potential exposure to proceedings before the Tribunal, and risk significant procedural litigation arising as to the meaning and operation of these provisions.

5.7 In addition, in relation to collective proceedings, prior to the commencement of new Section 47E CA98, the provisions within new sub-sections (3)–(6) Section 47E CA98 would not apply to claims arising before commencement of the relevant paragraph, even though collective proceedings could be brought in respect of such claims.

5.8 The current position therefore needs to be addressed by inserting additional provisions into the draft Bill and/or by way of transitional arrangements, for example:

5.8.1In relation to individual stand-alone claims, providing that the Limitation Act 1980 applies to claims arising before the commencement of Paragraph 8 (reflecting the current position, where such claims can only be brought in the High Court and are subject to the limitation rules within the Limitation Act 1980).

5.8.2In relation to individual follow-on claims, providing that the Limitation Act 1980 applies to claims arising before the commencement of Paragraph 8, unless this would lead to a claim being time-barred where this would not have been the case under the current regime, in which case the latter would apply (requiring transitional provisions within the draft Bill and/or the revised Tribunal Rules).

5.8.3In relation to collective proceedings, as outlined above we consider that such proceedings should only apply to claims which arise after the commencement of Paragraph 5, in which case these issues would not arise.

Limitation periods where the applicable law is not English law

5.9 The Government Response stated that, to allow the Tribunal to become a major venue for competition litigation, limitation periods for claims before the Tribunal would be harmonised with those of the High Court.17 The draft Bill seeks to effect this policy intention through proposed new Section 47E CA98.

5.10 However, new Section 47E(2) CA98 does not do so in all respects. It appears to assume that the limitation period for all claims under Section 47A or 47B CA98 will be governed by the law of the forum of the proceedings (ie by English law, Scottish law or Northern Irish law as applicable). The law applicable to some such claims may, however, be a foreign law, and therefore the applicable limitation period should be governed by that foreign law, as is the case in the High Court pursuant to the Foreign Limitation Periods Act 1984.

5.11 It should therefore be clarified that Section 47E(2) CA98 does not affect the limitation position where the claim is governed by a foreign applicable law, for example by providing that the Foreign Limitation Periods Act 1984 applies to claims in proceedings before the Tribunal as if the claim were an action in a court of law.

Limitation periods in collective proceedings

5.12 In relation to proposed new Sections 47E(3)-(6) CA98, we agree that some form of suspension of the running of the limitation period is necessary. This should prevent the need for claimants to commence parallel individual claims on a protective basis. However, we are of the view that any such suspension needs to be appropriately circumscribed to avoid unduly extending overall limitation periods and giving rise to uncertainties for defendants who might find themselves exposed to new claims late in the day if the collective proceedings do not run their course.

5.13 Accordingly, we do not consider it necessary or appropriate upon resumption of the running of the limitation period to provide for a minimum limitation period of six months (as is currently the case under proposed new Section 47E(6) CA98). A claimant should not be able to benefit from a longer limitation period where the initial claim was brought very late in the day just because collective proceedings had been pursued which ultimately did not run their course.

5.14 It could also be usefully considered whether additional events triggering the resumption of the running of the limitation period should be included within proposed new Section 47E(6), such as: (i) in the case of opt-in proceedings a person having decided to opt in; and (ii) in the case of opt-out proceedings the relevant time period having expired without the person having opted out.

5.15 It must also be ensured that, depending on the reason for the cessation of collective proceedings, claimants do not obtain “another bite at the cherry” through this process. In this context we are not clear as to the intention of proposed new Section 47E(5)(c) CA98 which suggests that if a claim brought in collective proceedings is rejected an individual claim could then be commenced.

5.16 Finally, we note that we are not clear as to the meaning of the reference within proposed new Section 47E(3) CA98 to “where a claim is made in collective proceedings at the commencement of those proceedings” and suggest that this made clearer.

Extension of statutory limitation periods

5.17 Proposed new Section 47E(7) CA98 provides a power for the Tribunal to effectively extend statutory limitation periods via its Rules, by deferring the date on which the limitation period commences. We are not clear what circumstances this is designed to cover. Given the importance of limitation periods for certainty, and the intention to align the position on limitation in the Tribunal to that applicable in the High Court, this does not appear to be appropriate.

6. Appeals (Paragraph 9 Schedule 7 of the Draft Bill/Proposed New Section 49 CA98)

6.1 The rationale for not making decisions of the Tribunal on the award of “costs and expenses” in the context of proceedings under proposed new Sections 47A and 47B CA98 appealable (under proposed new Sections 49(1A)(a) and (1B) CA98) is not clear to us. It is important in our view that decisions of the Tribunal on costs and expenses be appealable, as is the position in the High Court.18

7. Collective Settlement (Paragraphs 10–11 Schedule 7 Draft Bill/Proposed New Sections 49A–49B CA98)

7.1 Given the importance of this issue in incentivising settlements, we consider that new Sections 49A and 49B C98 should expressly recognise that the Tribunal may make an order approving a proposed collective settlement as just and reasonable (under Section 49A(5) or Section 49B(8) CA98) notwithstanding the fact that the terms of the collective settlement provide for any damages not claimed by represented persons within the specified period to be paid to a recipient other than that specified in proposed new Section 47C(5) CA98,19 including to the defendant(s).

7.2 We are not clear as to the meaning and intention of the reference within proposed new Section 49B(1)(b) CA98 (on collective settlement orders where a collective proceedings order has not been made) to the Tribunal “disregarding any limitation period applicable to a claim in collective proceedings” when assessing whether, if collective proceedings were brought, the claims could have been made at the commencement of the collective proceedings.

7.3 Finally, as the only claims which can be included in the opt-out collective settlement would be claims alleging breach of the CA98 and/or the Article 101/102 TFEU prohibitions, the courts would need to ensure that any attempt to circumvent a settlement by seeking to bring what is in reality a settled competition law claim on another basis would be regarded as an abuse of process and struck out.

8. Approval of Redress Schemes by the CMA (Paragraph 12 Schedule 7 Draft Bill/Proposed New Sections 49C–49E CA98)

Regulations

8.1 Proposed new Section 49C(5) CA98 provides that the Secretary of State may make regulations relating to the approval of redress schemes by the CMA. To aid debate and understanding of the relevant provisions it would be helpful for the draft regulations to be ready when the Bill is introduced to Parliament, in particular given the regulations will contain provisions on some of the key aspects of the approval process.

Redress scheme as a form of ADR

8.2 If a redress scheme is to be an effective form of ADR, as envisaged in the Government Response, undertakings offering a redress scheme need to be able to seek certainty that those who have applied for and received compensation under the scheme will not bring proceedings in relation to the harm they have suffered which has been so compensated. Without such certainty there would be little or no incentive for a prospective defendant to propose a redress scheme to the CMA.

8.3 We therefore consider that there should be an express provision in proposed new Section 49C CA98 that the terms of a redress scheme may provide that a person waives its rights to bring a claim (either in the Tribunal or elsewhere), or seek payment under a collective settlement order, if it has been compensated under a CMA-approved redress scheme for alleged loss suffered as a result of the infringement of competition law to which the redress scheme relates.20 This would not, of course, prevent a victim of anti-competitive behaviour from choosing to commence proceedings rather than obtaining compensation through a redress scheme.

Definition of “infringement decision” in the context of redress schemes

8.4 Proposed new Section 49(C)(8)(a) CA98 provides that, for the purpose of the provisions relating to the redress scheme, “infringement decision” means a decision of the CMA that the CA98 and/or Article 101/Article 102 TFEU prohibitions have been infringed, or a decision of the European Commission that the Article 101/Article 102 TFEU prohibition has been infringed.

8.5 Decisions of the Tribunal are not included. This is inconsistent in our view with the ability of claimants to bring claims in respect of such decisions of the Tribunal under proposed new Sections 47A and 47B CA98 (and the ability to seek approval of collective settlements in relation to claims in respect of such decisions).21

8.6 It is not clear whether references to the CMA in this section are intended to include references to the concurrent regulators,22 in respect of both the definition of infringement decision, and, if this does include decisions of the concurrent regulators (which would be sensible), which entity has the power to approve a redress scheme—ie the CMA or the applicable concurrent regulator. We suggest that this is clarified.

9. Fast-Track Cases (Paragraph 19(3) Schedule 7 of the Draft Bill/Proposed New Section 14(1A) EA2002)

9.1 Proposed new Section 14(1A) EA2002 requires that fast-track cases are dealt with by a single Tribunal member. This may be appropriate in some cases. However, there may be other cases where the Tribunal would benefit from the involvement of “wing-members” with expertise in economics or other fields, depending on the case in question.

9.2 Accordingly, we consider that the Tribunal should be entitled to proceed with a single member in such cases, but not be obligated to do so. We therefore propose that the word “shall” is replaced with the word “may” within this section.

10. Infringement Decisions (Paragraph 14 Schedule 7 Draft Bill/Proposed New Section 58A CA98

10.1 Proposed new Section 58A CA98 provides that the court or the Tribunal is only bound by an infringement decision when it has become final. Finality is defined by reference to the time for appeal having expired without an appeal having been brought, or to the infringement decision having been confirmed on appeal.

10.2 This provision in our view potentially risks giving rise to similar issues to those which have arisen in the context of the current limitation period applicable in the Tribunal and the impact of appeals of decision of the European Commission to the EU courts on that period, and leading to these issues being re-litigated. Consideration should therefore be given as to whether to specify within the draft Bill whether appeals on penalty only prevent a decision becoming final, and whether an appeal by one addressee of the infringement decision causes this not to become final in respect of the other addressees.

11. Tribunal Rules (Paragraph 31 Schedule 7 Draft Bill/Proposed New Paragraphs 15A–16C Schedule 4 EA2002)

11.1 Paragraph 31 of Schedule 7 of the Draft Bill (as to proposed new Paragraphs 15A-15C of Schedule 4 EA2002) provides that Tribunal Rules may make provision in relation to fast-track claims, collective proceedings, and collective settlements. Such rules may contain provisions which are of critical importance to the operation of the new procedural mechanisms. Therefore, to aid proper debate of the Bill in Parliament, it would be helpful if the relevant draft revised Tribunal Rules are published ahead of the Bill’s introduction.

11.2 In terms of the contents of the rules, proposed new Section 15B Schedule 4 EA2002 should also oblige the Tribunal to make provision in its revised Rules for: the operation of contribution proceedings in collective proceedings and more generally; and the making of settlement offers (and the revised Rules should amend the current provisions in order to bring these into alignment with those applicable in the High Court).23

11.3 Finally, paragraph 5.60 of the Government Response stated that “loser-pays” costs rules should be explicitly made the starting point for costs awards in private enforcement cases. This is a crucial safeguard (in particular for collective proceedings), and therefore we suggest that this is specifically included within Paragraph 31 of the draft Bill.

23 August 2013

1 This submission is made in addition to our response of 24 July 2012 (“HSF Response”) to the Department of Business, Innovation & Skills (“BIS”) in respect of its April 2012 consultation document Private actions in competition law: a consultation on options for reform (“Consultation Document”)(available at pages 7ff of Private actions in competition law—a consultation on options for reform responses—G to N: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/69135/private-actions-in-competition-law-a-consultation-on-options-for-reform-responses-g-to-n.pdf).

2 http://www.herbertsmithfreehills.com/

3 Please contact Stephen Wisking, Kim Dietzel, Molly Herron or Tamara Todorovic.

4 Or Court of Session as applicable.

5 At paragraph 4.5.

6 Or County Court, Court of Session or Sheriff Court as applicable.

7 If it is considered that there is no longer need to do so, given the reference to Section 47A CA98 (which will in due course cover stand-alone claims) within Section 16(4) EA2002, it would be useful if this were clarified.

8 This would require consequential amendments to other provisions, such as proposed new Section 49 CA98 on further appeals.

9 Ie Ofcom—Office of Communications, Ofgem—Office of Gas and Electricity Markets, NIAUR—Northern Ireland Authority for Utility Regulation, Ofwat—Water Services Regulation Authority, ORR—Office of Rail Regulation, CAA—Civil Aviation Authority, and Monitor (in respect of health care services in England).

10 We assume therefore it is envisaged that the definition of infringement decision within proposed new Section 47A(5) CA98 will be covered by the existing provisions of the applicable sectoral legislation (for example Section 36A(3A) Gas Act 1986 in respect of Ofgem) which provide for references to the OFT (in due course the CMA) within Part I CA98 to be read as references to the applicable sectoral regulator “so far as necessary for the purposes of, or in connection with” the exercise of concurrent competition functions.

11 In particular, paragraph 5.55 of the Government Response stated that as part of the certification process the Tribunal would be required to assess the adequacy of the representative. Paragraph 5.32 of the Government Response stated that law firms, third party funders and special purpose vehicles would not be able to act as representatives for the purposes of bringing collective proceedings.

12 This would enable the Tribunal to ensure, for example, that: a class member is only able to act as representative if it has suitable funding arrangements in place (such that it would be able to meet a costs order against it); a class member is not able to act as representative if it is in effect acting on behalf of a law firm, third party funder, or special purpose vehicle; and a class member is only able to act as a representative if it has suitable governance arrangements in place for the conduct of the proceedings on behalf of the class.

13 This would require consequential amendments to proposed new Paragraph 15B Schedule 4 EA2002.

14 We consider that revised Tribunal Rules should include examples of the factors which it will into account when deciding whether it is most suitable that a claim is brought on an opt-out or an opt-in basis (recognising that this may need to be non-exhaustive given the variety of cases which could arise).

15 See the HSF Response.

16 See Section 47A CA98 and Rule 31 of the Tribunal Rules.

17 And with the Court of Session for proceedings in Scotland. See for example paragraph 4.7 of the Government Response.

18 We note that the issue of costs will be of particular importance in collective proceedings under new Section 47B CA98 (and will undoubtedly be one of the key factors potential claimants will take into account when assessing whether or not to bring a claim).

19 As envisaged within paragraph 5.65 of the Government Response. More generally, it may be preferable if under proposed new Section 47C(5) CA98 the Tribunal had residual discretion to order an alternative recipient of unclaimed damages in exceptional cases.

20 Alternatively, Section 49C CA98 could provide that the CMA may not take into account whether the terms of a redress scheme include such a provision when deciding whether to approve a redress scheme.

21 If there is a concern that the CMA would not have sufficient knowledge of the relevant competition law infringement, we consider such a concern to be unfounded, in particular given that the CMA will be able to approve a redress scheme flowing from a decision of the European Commission.

22 As a result of the existing provisions of the applicable sectoral legislation which provide for references to the OFT (in due course the CMA) within Part I CA98 to be read as references to the applicable sectoral regulator “so far as necessary for the purposes of, or in connection with” the exercise of concurrent competition functions.

23 In accordance with paragraph 6.12 of the Government Response.

Prepared 20th December 2013