PRIVATE ACTIONS: plan to overcome claimants' reluctance


New ways of funding private antitrust actions could provide profitable opportunities for competition lawyers, it has been claimed.



The Office of Fair Trading (OFT) last week issued an informal consultation addressing the reluctance of UK businesses and consumers to bring private proceedings against cartels and others trading anti-competitively.



Pointing to the 'major disincentive' to bringing claims of a potential exposure to litigation costs, the OFT proposed the introduction of no win, no fee arrangements that would allow a claimant's lawyer an uplift of greater than 100% if the case is won.



Clearer guidance on cost-capping orders, which would allow courts to cap parties' liability for each others' costs, should also be provided, the OFT said.



Other key proposals include broadening the availability of representative actions - where representative bodies bring actions on behalf of a category of people - and promoting more effective ways of resolving these claims, such as the establishment of a Competition Ombudsman.



Renato Nazzini, a solicitor and assistant director at the OFT, said: 'The impetus behind the consultation is to promote a competition culture to ensure consumers and companies obtain redress. Lawyers have a key role to play in this process.'



David Greene, head of litigation at London firm Edwin Coe and vice-president of the London Solicitors Litigation Association, said enhanced fee levels would encourage lawyers to take on challenging cases, while still protecting the companies and individuals concerned.



He added: 'Cost capping, particularly for the small claimant, is an area that needs urgent consideration. Properly administered by the courts, it lets the claimant, at an early stage in the litigation, balance recoverable costs against the expense of proceeding with the action. It's a developing theme and doesn't yet quite compensate for the threat of adverse costs, but it has definite potential.'



Jonathan Rayner