bnt attorneys for CEE close.straight.forward

Upcoming Flood of Competition Damages Actions?

Hungary: An American Perspective

By the end of 2016, Hungary, similar to other EU Member States, must implement Directive 2014/104/EU. The Directive is intended to improve conditions of private enforcement against infringements of EU and national antitrust laws by setting common minimum standards in all Member States.

Among the more significant changes proposed is that parties will have easier access to evidence. However, in order to ensure that undertakings continue to co-operate with competition authorities, leniency statements and settlement submissions cannot be accessed.

The Directive also establishes a statute of limitations of five years which will be suspended (or interrupted) during the investigation by a competition authority. In the latter case the infringed party will have at least one year after the final decision to initiate a damages action.

As in the U.S. the Directive is expected to streamline private damages claims against anti-competitive market behaviour.
In the U.S. both parties may obtain discovery regarding basically any non-privileged matter that is relevant to either party's claim or defence. A statute of limitation of four years applies to antitrust cases. This means that a plaintiff may only recover damages if the suit is brought within four years after the violation occurred.  

In the EU, current law only allows a plaintiff to be compensated for actual damage for harm suffered and profits lost. In the U.S. however a plaintiff can receive an award equal to triple their actual damages if their cases are successfully litigated. In cases of multiple defendants, if one defendant makes a settlement offer the remaining liability is shifted to the other defendants. This encourages parties to settle. In the U.S., antitrust lawsuits are extremely costly. Most cases are settled out of court.

Currently, it is unknown what effect implementation of the Directive will have on the Hungarian practice of private damages actions. There could be an increase in the damage claims for infringement of antitrust law. There is also the possibility that similar to U.S. practice, most cases will be settled out of court.

As the situation continues to develop, we will keep you informed of further updates.

[bnt thanks Charles Blackledge for his valuable contribution to this newsletter. Charles is an American law student at the Cumberland School of Law who interning with the bnt law firm via the Santa Clara University Law School Summer Abroad Program.]

Source: Directive 2014/104/EU of the European Parliament and of the Council of 26 November 2014 on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union (OJ L 349, 5.12.2014, p. 1–19; Sherman Act of 1890; The Clayton Act of 1914)