How to tackle damages relating to competition law?

The bill implements Directive 2014/104/EU, whose objective is to provide comprehensive and uniform rules for the recovery of private-law damages for infringements of competition law in all member states. The new law introduces a number of novelties into Czech competition law. First, it prescribes special rules on the extent and manner of damage compensation. The new act regulates damage compensation differently from the Civil Code: for example, it disallows the possibility for the court to determine (reduce) the amount of damages; damage incurred will thus have to be compensated fully. The law also introduces the legal presumption of damage occurrence, according to which damage occurs every time cartel agreements infringe upon competition. Another novelty is a special provision regulating the length of the limitation period, which will be five years and will commence on the date on which the injured came to know about the damage, the person liable for its compensation and about the competition infringement, but not before the date on which the competition infringement ended. The bill also provides a new definition of a cartel agreement and sets rules for the compensation of damage caused by several persons.

From a procedural viewpoint, the bill specifically regulates proceedings to compensate for damage caused by competition infringements. A new concept of providing access to documentation will be introduced, according to which courts will be authorised to impose a duty on certain persons to provide access to documentation supporting the state and condition of a thing, potentially charging a penalty of up to CZK 10 000 000 or 1% of net turnover for the accounting period. Another important novelty is that all decisions confirming competition infringements made by other courts, the Office for the Protection of Competition or the European Commission are binding for the courts that decide on damage compensation. When applying the presumption of damage occurrence due to competition infringements through a cartel agreement, the injured parties will be in a better position during evidence proceedings, as it will be upon the wrongdoers to prove that competition infringements did not result in any damage.

It is evident that the new law will strengthen the position of injured parties in private-law proceedings for damages arising from infringements of competition law. The entire process of recovering damages should become more effective. On the other hand, the introduction of procedural concepts into a legal regulation other than the Civil Procedure Rules, the legal system’s primary civil procedural regulations, may make procedural law less transparent. The bill is currently at the first reading in the chamber of deputies. It is quite clear that the deadline for transposing the directive into local legislation will not be met, as it was 27 December 2016.