Recent rulings spell bad news for the Danish bar and Italian lawyers, while the EC wants to see more consumers bring competition cases, June O'Keeffe and Andrew Laidlaw report

Something is indeed amiss in the Kingdom of Denmark. Not only has that country's self-belief taken a bit of a battering owing to the infamous cartoons that were published by a Danish newspaper, but closer to home the Danish bar has its own woes with which to contend.


It all started on the back of an appeal to the European Court of Human Rights by two Danish workers - a gardener and a student doing a summer job - regarding the right to opt out of closed-shop trade union agreements. The applicants argued that they should not be compelled to join a union as article 11 of the European Convention on Human Rights on the right to association could also be construed as granting negative rights - the right to not join an organisation.


The applicants won their appeal and the Danish government immediately pounced on the judgment to announce that membership of the bar could no longer be compulsory. This is despite the ongoing Clementi-style review of the legal profession in Denmark, which is not scheduled to report back to the government until the spring, and previous rulings which have indicated that a bar association is not a trade union.


Elsewhere in Europe, other governments are also scrutinising closely what the regulators of the legal profession are up to; the Slovak government (a relatively new kid on the block in EU terms) recently fined its bar for its restrictive advertising rules.


Meanwhile, further south, two Italian lawyers are involved in court cases to do with the way in which their fees are calculated. Lawyers' fees in Italy (and in other EU countries such as Germany) are strictly regulated. Not only is there a minimum fee but there is also a maximum that can be charged. While some might think this is a good idea, the European Court of Justice disagrees.


The court, in a recent pre-judgment opinion from an advocate-general, stated that fixed fees of this nature could be seen as a barrier to cross-border trade in that lawyers from other EU countries who wanted to undercut them - or presumably go beyond them - are forbidden from doing so. The highest European court has never shied away from controversy and has often been accused of judicial activism. If the final judgment of the court confirms the opinion, as it is likely to do, the consequences could be far-reaching for EU countries' freedom to decide on how to regulate their lawyers on a key matter such as fees.


It is not often that authorities encourage so-called judicial activism, but that could be the case in Europe soon. The European Commission has noticed that European consumers are a relatively non-litigious lot in comparison to our transatlantic cousins - particularly when it comes to competition law matters.


Unlike the US, there are a limited number of examples of domestic courts awarding damages to companies that have been harmed by the anti-competitive behaviour of a supplier or competitor. The enforcement of competition law in Europe is carried out predominantly by the commission and national authorities, such as the Office of Fair Trading (OFT). As a recent study by City law firm Ashurst concluded, there is 'total underdevelopment' in the area of damages actions based on competition law. Currently it can be excessively difficult, prohibitively expensive or simply impossible to bring damages actions in most EU countries. But all this may be set to change.


The commission and the OFT both think an increased ability and willingness on the part of victims of anti-competitive behaviour to seek damages would act as a complement to their own enforcement of competition rules. Damages claims would compensate victims for loss, create further deterrent effects and ensure the enforcement of antitrust law.


The right to bring such actions exists in EC law and has been confirmed by the court, which stated that the effectiveness of European competition law depends on the availability of damages to those who have suffered harm. The Court of Appeal put this principle into effect for the first time in 2004. Such examples are still rare, however, and the Ashurst report flagged up many barriers and disincentives to bringing damages actions. Based on the report's findings, the commission has now published a Green Paper to look at these issues in further depth and suggest some options for change.


Interestingly, however, many of the issues at hand stem from the rules of domestic civil procedure. One of the biggest hurdles that must be overcome is the evidential burden that exists in relation to cartels, which by nature are shrouded in secrecy. Allowing follow-on actions (after the commission or OFT has fined a cartel) will help relieve this but otherwise, should the burden of proof on the claimant be altered?


Final consumers are particularly limited in terms of the claims they can bring, whether individually, collectively or through a consumer organisation. The commission does not appear to favour US-style class actions or the availability of triple damages as a sanction for particular behaviour. But it does suggest the possibility of double damages. Should damages not be more punitive and deterrent in nature? It also discusses allowing actions covering all claimants (direct purchasers and those further down the supply chain) and controlled by the courts.


What is more, are the answers the same for each EU country? Can we really have an EU solution to this problem? Would it strike the right balance, without us becoming too litigious? Maybe such a tendency to seek damages will develop anyway over time of its own accord.


You have until 21 April to tell the commission what you think and they are eager to hear from you. The Law Society is holding a conference in London on 7 April to discuss the issues too, so feel free to come along and tell us.


June O'Keeffe is head of the Law Society's Brussels office. Andrew Laidlaw is internal market policy adviser at the office. For information on the conference, e-mail: andrew.laidlaw@lawsociety.org.uk