Disclosure of Leniency Documents in the United Kingdom: Is the Draft Directive Creating Barriers?

Posted by D. Daniel Sokol

Sebastian Peyer (University of Leicester) asks Disclosure of Leniency Documents in the United Kingdom: Is the Draft Directive Creating Barriers?

ABSTRACT: The European Commission has recently proposed a Directive on rules governing actions for damages for the infringement of competition law (“draft Directive”). The proposal seeks to regulate-“optimise” in the language of the Commission-the interaction of public and private enforcement in the European Union. At the same time, the proposals seek to ensure that victims of anticompetitive conduct can obtain full compensation for the violation of EU competition law in the courts of the Member States.

The draft Directive is the result of a decade-long debate about the role private claimants should play in the enforcement of EU and national competition rules. It comes in the wake of the seminal Courage and Manfredi rulings that established a right to compensation for the infringement of EU competition rules, and proceedings in the European and national courts where parties sought access to leniency related material to support such damages claims. The draft Directive suggests, among other things, the judicially controlled disclosure of evidence in competition litigation to facilitate private antitrust enforcement. The revelation of documents in competition law proceedings is likely to be controversial in many Member States because ordering the defendant to release substantial and potentially damaging material is an alien concept in most EU civil procedure laws. It is often feared that the discovery of documents in the possession of the respective other party could impose a financial burden on defendants and claimants alike. The proposals are also likely to create problems in Member States that already have disclosure rules in place, namely the United Kingdom. If the draft Directive is adopted in its current shape, leniency and settlement submissions are to be excluded from disclosure. The absolute protection of some core documents potentially conflicts with the Pfleiderer decision of the Court of Justice of the European Union (“CJEU”) and the U.K. High Court of Justice’s interpretation of this precedent. In the United Kingdom, where civil procedure provides for broad disclosure of evidence, the courts have refrained from establishing a privilege for leniency and settlement submissions that would protect them from discovery. On the contrary, the U.K. High Court has applied a weighing test with respect to leniency materials in the National Grid litigation. If some documents were absolutely protected from disclosure applications, the national test would need adjustments. This article looks at the potential impact of the draft Directive on U.K. discovery in antitrust cases and the lessons that have been learned in the U.K. courts so far. The focus will be on the practice involving leniency and settlement documents in private litigation. The U.K. experience may help to understand how discovery procedures could work in other jurisdictions and it also shows that sensible judicial oversight can limit the costs associated with the disclosure of evidence. Section 2 briefly describes the disclosure regime in the United Kingdom and the likely impact of the EU disclosure proposal. Section 3 looks at how the U.K. courts have solved the specific problem of access to leniency submissions. Section 4 discusses the potential issues arising from the limitations suggested in the draft Directive. Section 5 concludes.