Follow-On Damages Actions.
1. Concept and Legal Basis
A follow-on action is brought after a final decision by a regulator such as:
European Commission
UK Competition and Markets Authority (CMA)
Key Feature:
The infringement is already established, so the claimant only needs to prove:
Loss suffered
Causation
Quantum of damages
2. Follow-On vs Stand-Alone Actions
| Feature | Follow-On Action | Stand-Alone Action |
|---|---|---|
| Prior finding required | Yes | No |
| Burden of proof | Reduced | Full burden on claimant |
| Complexity | Lower | Higher |
| Typical context | Cartels, abuse findings | Emerging or unproven violations |
3. Legal Framework
A. EU Law
Article 101 & 102 TFEU (cartels and abuse of dominance)
Damages Directive (2014/104/EU):
Presumption that cartels cause harm
Facilitates disclosure of evidence
Allows joint and several liability
B. UK Law
Competition Act 1998
Enterprise Act 2002
Jurisdiction: Competition Appeal Tribunal (CAT)
4. Key Elements of a Follow-On Claim
A. Binding Effect of Infringement Decisions
A final decision by a regulator is binding in civil proceedings.
Case Law:
Courage Ltd v Crehan (2001) C-453/99
Established the right of individuals to claim damages for competition law breaches.
Pfleiderer AG v Bundeskartellamt (2011) C-360/09
Confirmed access to evidence from competition authorities for damages actions.
B. Proof of Loss and Causation
Even with a prior infringement, claimants must show:
They suffered loss
The loss resulted from the infringement
Case Law:
Manfredi v Lloyd Adriatico Assicurazioni (2006) Joined Cases C-295/04 to C-298/04
Confirmed that any individual can claim damages where there is causal harm.
C. Passing-On Defence
Defendants may argue that the claimant passed overcharges to customers.
Case Law:
Hanover Shoe Inc v United Shoe Machinery Corp (1968) US Supreme Court
Limited use of passing-on defense (in US context but influential).
Sainsbury’s Supermarkets Ltd v Mastercard Inc (2020) UKSC 24
Addressed passing-on and causation in interchange fee litigation.
D. Quantification of Damages
Damages aim to restore the claimant to the position absent the infringement.
Methods:
Overcharge analysis
Before-and-after comparison
Economic modelling
Case Law:
Devenish Nutrition Ltd v Sanofi-Aventis SA (2007) EWCA Civ 1086
Clarified limits of restitutionary remedies in competition claims.
E. Collective and Representative Actions
Follow-on claims often involve multiple claimants, especially in cartel cases.
Case Law:
Merricks v Mastercard Inc (2020) UKSC 51
Landmark ruling enabling collective proceedings in the CAT.
F. Limitation Periods
Time limits usually begin after:
Final infringement decision
Claimant knowledge of harm
Case Law:
Arcadia Group Brands Ltd v Visa Inc (2015) EWHC 3561 (Comm)
Addressed limitation issues in competition damages claims.
5. Types of Follow-On Claims
Cartel Damages Claims
Price-fixing, market-sharing
Abuse of Dominance Claims
Excessive pricing, exclusionary practices
Vertical Restraint Claims
Distribution restrictions
Consumer Collective Claims
Mass harm (e.g., interchange fees)
6. Defences in Follow-On Actions
Passing-on defence
Lack of causation
Limitation period expiry
Mitigation failure
Jurisdictional challenges
7. Remedies Available
Compensatory damages (primary remedy)
Interest (often substantial)
Costs recovery
Declaratory relief
Punitive damages are generally not available in EU/UK competition law.
8. Key Case Law Summary
Courage v Crehan (2001) – Right to claim damages
Manfredi (2006) – Causation and compensation principles
Pfleiderer (2011) – Access to evidence
Devenish Nutrition (2007) – Limits of restitution
Sainsbury’s v Mastercard (2020) – Passing-on and causation
Merricks v Mastercard (2020) – Collective actions
Arcadia v Visa (2015) – Limitation periods
Hanover Shoe (1968) – Passing-on doctrine influence
9. Practical Significance
Follow-on damages actions are crucial because they:
Enhance private enforcement of competition law
Deter anti-competitive conduct
Provide compensation to victims
Complement regulatory enforcement
10. Conclusion
Follow-on damages actions represent a powerful mechanism in competition law enforcement, combining:
Public enforcement (regulators)
Private rights (claimants)
The jurisprudence consistently emphasizes:
Effectiveness of EU competition law rights
Access to justice for victims
Economic accuracy in damage calculation
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