Private litigation against firms found to have violated competition law is now a firmly established part of the competition law landscape. Claims for damages arising from antitrust infringements are being brought in many national jurisdictions, and EU countries are introducing class action regimes, while the European Commission is considering legislation to harmonize procedures and facilitate damages actions. Indeed, in its "White Paper on Damages Actions for Breach of the EC Antitrust Rules" published in 2008, the Commission made clear that victims should be able to claim compensation for actual loss, and for loss of profits (including interest).
Private actions for damages are becoming increasingly common as businesses attempt to enforce their rights or seek compensation for damages. The possibility that an agreement may be invalidated where it contravenes competition law also figures frequently as a factor in commercial disputes.
In parallel with the development of litigation, whether resulting from antitrust decisions of competition authorities or as private actions, there has been increasing demand for accurate and reliable economic analysis to underpin legal cases. As a result, there is growing recognition of the power of economic analysis as a tool for assessing damages in litigation.
We are regularly employed in such cases for our ability to communicate sophisticated and sound economic analysis to non-economists in a reliable, straightforward and precise manner. We apply a range of models and techniques which can provide reliable quantification of damages and which are robust to challenge in litigation. Our experts have extensive hands-on experience in preparation of expert witness reports and presentation of oral testimony in many different fora including Competition Tribunals and National Courts.
Our expertise has been used in a variety of litigation settings.
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Damages arising as a result of anti-competitive conduct
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Claims for damages may arise where a breach of competition law has occurred, often as a follow-on action after a breach has been found by a competent antitrust authority. As a first step in the process, it is necessary to assess the type of harm being inflicted or suffered as a result of the illegal behaviour. For example, it might be a cartel overcharge; or exclusionary conduct causing a fall in sales or exclusion from the market. Once the type of harm is identified, the magnitude of damages must be calculated. To make this calculation it is necessary to compare the effects of the anti-competitive behaviour with a counterfactual that assumes legitimate market conduct. Our understanding of the relationships between market structure and competitive outcomes, together with our ability to identify the effects of anti-competitive actions, allows us to develop robust damages estimates based on credible counterfactuals and assess whether damages might have been passed on along the commercial chain.
Our economists are able to undertake complex damages quantification by means of a very wide range of techniques, varying from simple analysis of financial data to complex econometric models. |
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Damages arising in other contexts |
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The development of reliable quantitative techniques, allied to experience in constructing robust and persuasive "but for" calculations of market outcomes, has potentially wide application in a range of commercial litigation. The tools used by economists in competition law litigation are increasingly being recognised for the contribution they can make in other areas of commercial litigation in which damages are at issue such as, for example, IP-related disputes, litigation on the setting of fair, reasonable and non-discriminatory prices (so-called FRAND), and litigation to quantify the impact of events or breaches of contract in areas outside the field of competition law.
Our role on such cases varies from case to case. Depending on the requirements of the specific case, we undertake one or more of the following roles.
- Assist and participate in court proceedings or arbitrations.
- Prepare independent economic reports and analyses. These are either submitted as part of the client's main submissions or as a stand-alone economic report.
- Prepare expert reports and defend those reports under cross-examination.
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