In-House Counsel As A Profit-Centre? Competition Litigation And Funds

Competition issues have traditionally meant only one thing for in-house counsel — cost (and quite often a large cost).

Too add to the pain, redress for corporate victims of anti-competitive behaviour has been notoriously difficult: in the UK, follow-on damages claims in the specialist Competition Appeal Tribunal are rare and often arduous processes.

However, things are changing.

In-house counsel can now feel more confident about proactive engagement with litigation on competition grounds. There is a real prospect of substantial damages, with the UK courts being a "favourite" jurisdiction. The on-going Mastercard litigation, which is continuing in spite of Mastercard's appeal against the Commission's interchange fee decision, is a notable example.

The messages on competition litigation from the European Union are similarly encouraging:

The Commission has adopted today long-awaited proposals aimed at facilitating damages claims. The new Directive's main purpose will be to help claimants win compensation from companies breaking competition rules. The Court of Justice has very recently opened up the possibility of claimants gaining greater access to confidential documents — including whistleblowing and leniency claims — from cartel investigators' files. (See C-536/11 Donua Chemie and others). This ruling should make it easier for claimants to establish a cause of action in litigation. But, how can I be a "profit-centre" when I need a budget for litigation and we may not win?

In reality, competition litigation may not be as risky as other litigation claims. Often the cause of action is already established. Companies have made admissions to regulators publicly. The only issues (albeit complicated in some cases) are causation and quantum. This should make claims more attractive for companies.

In addition, we have seen heightened interest from litigation funds in providing support for competition litigation claims (probably because a significant part of the work — the cause of action — has already been established).

This is potentially where in-house counsel can offer their businesses a real profit centre: at its simplest, a litigation fund will pay legal costs and take its cut of any final award. This removes risk from the whole process for companies: even those that could potentially self fund the litigation. It is an interesting proposition for both-in-house counsel and their business colleagues: the prospect of substantial damages at no or...