The European Directive On Damages Actions: A Missed Opportunity To Reconcile Compensation Of Victims And Leniency Incentives

In this article we analyze the effects of the recent European Directive on rules governing actions for damages under national law for competition law infringements on an effective leniency program from deterrence and compensatory justice perspectives. We show that the Directive resolves the uncertainty following the Pfleiderer and subsequent judgments on a national and EU level, but creates new uncertainties by introducing provisions in order to protect either leniency incentives or victims’ right of compensation. We argue that an alternative solution could have been chosen, according to which cooperating undertakings that have received immunity or reduction from fines would be granted the same protection against damages liability. Following this alternative solution, the non-cooperating members of the cartel would then have to compensate the victims for the harm caused by the cartel. We show that, under certain conditions, this alternative is a superior approach to resolve the conflict between optimal leniency incentives and compensation for all victims.