The Impact of Contingency Fees on Collective Antitrust Actions: Experiments from Lithuania and Poland

in Review of Central and East European Law
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Contingency-fee agreements are one—if not the only—tool that can be used to ensure that small-stakes collective antitrust actions are heard, yet they are subject to strong resistance from the European Union. There is a concern that contingency fees could lead to abuses of the system or conflicts of interest, as has been seen in the United States. Contrary to eu policy, two proactive member states—Lithuania and Poland—have introduced the possibility of using contingency fees in group litigation in order to facilitate group actions. Despite having a lot of potential, this paper will demonstrate that the introduction alone of contingency fees will not facilitate the compensation objective that is embedded in the Directive on damages actions. In addition, it will show that the safeguard policy against frivolous litigation is sufficient to limit the possibilities for litigation abuses, but it is ineffective for monitoring the individual behavior of group representatives.

The Impact of Contingency Fees on Collective Antitrust Actions: Experiments from Lithuania and Poland

in Review of Central and East European Law

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23

From 2000 to the summer of 2015the nca investigated 47 cases of restrictive agreements (under Article 5 of the Competition Law LoC). The number of cases brought concerning the abuse of dominance (Article 7 of the LoC) is much lower than the number of cases involving infringements under Article 5 of the LoC. Although the nca has adopted a number of infringement decisions follow-on actions are rare. To my knowledge there have been only six private antitrust cases brought by plaintiffs involving infringements. None of private enforcement actions were initiated by consumers (rather by competitors). For further discussion of the development of private enforcement in Lithuania see Raimundas Moisejevas “Development of Private Enforcement of Competition Law in Lithuania” 8(11) Yearbook of Antitrust and Regulatory Studies (2015) 35–51; Ramūnas Audzevičius Žygimantas Juška and Vytautas Saladis “Lithuania” in Ilene Knable Gotts (ed.) Private Competition Enforcement Review (London Law Business Research Ltd. 2015 8th ed.).

27

Between 1999 and 2012there were no more than 10 private enforcement cases in Poland. For further discussion see Agata Jurkowska-Gomułka “Comparative Competition Law Private Enforcement and Consumer Redress in the eu 1999–2012” Centre for Antitrust and Regulatory Studies University of Warsaw 1–19 available at <http://www.clcpecreu.co.uk/pdf/final/Poland%20report.pdf>.

49

On 2 January 2003a private damages claim was brought by uab Šiaulių Tara against ab Stumbras. This action arose half a year after the adoption of the Decision of the Competition Council of the Republic of Lithuania of 30 May 2002 No. 6/b.

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