Cartel victims need better rightsOFT wants better redress for price-fix victims

27 November 2007

Victims of firms' anti-competitive behaviour have only a remote chance of getting compensation, a watchdog has warned.

The Office of Fair Trading said consumers and businesses still found it difficult to bring successful legal action.

It wants the government to make changes so individuals will find it easier to seek legal redress.

Millions lost

The current system means businesses have limited incentives for complying with competition law, according to the OFT's report.

Breaches of competition law can hit consumers and businesses collectively to the tune of millions of pounds, the watchdog says.

Its raft of proposals, published yesterday, aim to strengthen the existing private actions regime.

Legal redress

Elements of the new Enterprise Act 2002 aimed to make it easier for victims of competition law breaches to seek legal redress.

Despite the legal changes, an OFT report said: '... there remain significant barriers to those who have suffered loss (consumers and small and medium-sized businesses, in particular) taking a private action, such that the likelihood of obtaining compensation remains remote and that incentives for business to comply with competition law are more limited than was intended'.

This current situation '... impedes the overall effectiveness of the competition regime in the UK...', the report adds.

Funding

The OFT wants funding restrictions to be modified to ensure claimants can always find lawyers to represent them. And money should be made available for worthwhile cases which would not otherwise make it to court, the OFT recommends.

The watchdog now wants the government to consult on its proposed changes.

Which? Head of Legal Deborah Prince said:'Whilst a system is in place for an approved body to bring an action on behalf of consumers - in fact, this is the system we are using to take action against JJB Sports for the price-fixing of replica football shirt case - this system has limitations and in some ways favours the cartel and not the consumer. The OFT is hoping to iron out these imbalances through the recommendations it has announced.'